CO129-450 - Acting Governor Claud Severn - 1918 [10-12] — Page 61

:

C

70

7

Hongkong & Shanghai Pkg Burpen: London.

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nothing in such a transaction to make it attractive even were it

not dangerous. At beat it would mean a small immediate profit

and leave me without any means of replacing the coin in case of

necessity. The dollars would melt in Shanghai at Tls.71 per

quantity $100 and to import ́any/from Shanghai could probably not be done

under 75 and it is doubtful if any large amount of Mex. dollars

could be secured in any case. British and Mexican dollars are

the only coins legal tender here. The former can only be ob-

tained by minting in India (heavy shipping expenses and 2%

seignorage) and the latter are getting scarce, so the Colony

might be left without any means of obtaining currency.

The contention that the Authorities cannot ask the U.S.

to supply silver to China so long as we have a Reserve of $150

lace against our Note issue is truly Judicrous. There is no

real surplus mf stock of coin here in fact our holdings should

be higher than they are all things considered. Shanghai must

look elsewhere than to Hongkong for silver. I hope you will do

your beat to remove the false idea that we have too much silver

coin in the Colony as nothing could induce me to ship away any

coin under existing conditions; to do so would be pure madness.

It is very satisfactory to note that in case of necessity

any temporary increase in the circulation can be covered by

securities in London so long as we have say $100 lacs deposited

with the Government. Although agreed to by the Home Authorities

it might be necessary to have the ordinance altered as at present

it calls for dollar for dollar in the case of excess issue, i.e.

/when