CO129-423 - Governor Sir May - 1915 [7-8] — Page 28

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and at the commencement of the present year a similar purchase of

8277,065.10 in ten cent pieces was made for $240,000 in bank notes. No purchases have been made since February, and as the rate of dis-

-count has fallen considerably I do not for the present propose to

buy further.

5.

I enclose a schedule showing the rates of dis- -count, in terms of the notes of the authorised Banks of issue, which have been quoted in respect of British dollars and subsidiary coin on the first business day of each month since the commencement of 1914. A colum is added showing the discount on the ten cent piece as compared with the dollar.

6.

Gov

33818

I have addressed you in my Despatch lio. 223 of

the 16th. June regarding the existing premium on the note issues; and the policy of demonetizing ten cent pieces aims only at the re-establishment of the subsidiary coinage on a level, for exchange purposes, with the silver dollar. During the last two months the ten cent piece has been quoted at less than 2% below the British dollar, but it is believed that the reason for this lies largely in the fact that Chinese speculators are withholding very considerable suns from the market. It is however impossible to get any definite information on the subject, and there is a contrary report to the effect that it is no longer so easy a matter as it was to obtain Hongkong ten cant pieces from the Kwang Tang Province.

7.

The fact remains that the Colony's subsidiary coin is now quoted at a lesser discount, compared with the silver dollar, than at any time since the question of its depreciation assumed serious proportions; and the soundness of the policy which has been adopted is emphasized by the fact that Chinese subsidiary coin is today quoted at 19% below the Hongkong Bank Note, whereas Hongkong coin is at 8% discount.

8.

It remains, in my opinion, to continue the demonetization of all ten cent pieces received by way of revenue in Government Departments until the subsidiary coinage is once more

freely