CO129-449 - Governor Sir May & Acting Governor Claud Severn - 1918 [7-9] — Page 7

СОРУ,

sir,

HONGKONG AND SHANGHAI BANKING CORPORATION,

Hongkong, 12th. June, 1918.

6

A

With reference to the $1 note issue of this

Bank, the limit of which is $700.000. - I am of opinion that it would be advisable to increase the issue still further and

beg to suggest that the limit be raised to $1,000,000 or $1,200,000. At the present time the circulation is up to the full limit of $700,000, and we are therefore unable to meet

the local requirements for these notes.

Under ordinary circumstances the limit of

$700,000 should be more than sufficient for the requirements of this Colony, but the notes appear to find their way to Canton in considerable quantities, with the result that there are not sufficient in local circulation for the Colony's

requirements.

The position is difficult, as the circulation

At

is a very expensive one and we would prefer not to increase it, especially as any increase is only likely to relieve the situation temporarily, so long as the neighbouring Province absorbs the notes, & this will probably continue until such time as the Province has a reliable note issue ofits own.

the same time it seems essential that we should be in a posi- tion to supply moderate requirements of small notes, & in the event of the limit being raised we should only avail ourselves

of it gradually.

Owing to the loss to the Bank which the issue of small notes involves, it would be a relief if the Government could see its way to waive the tax of 1% p.a. on the one dollar

note issue.

The Honourable,

The Colonial Secretary,

Hongkong.

Tours, etc.,

(sa.)

F. J. Stabb,

Chief Manager.