CO129-469 - Governor Sir Stubbs - 1921 [9-12] — Page 279

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5. It is obvious, of course, that the Corporation must always keep a certain amount of coin and bullion in its own treasuries against its note issue for its own purposes, and possibly the amounts may be left to the discretion of the Corporation. The "Objects and Reasons" have been drafted on the assumption that this is the view which will be adopted. I may mention that the provision in question has never been treated as applying to the excess note issue, although it is arguable on the present section that it is so applicable.

6. The Corporation offer, as an alternative to the above requirement, to accept a provision that all note issues made outside the Colony shall be deemed to be part of the excess note issue, so that all such issues would be fully

covered in coin or bullion.

Sub-section (4) of the proposed new section 13 has been drafted in an elastic form because the details of the proposed custodian scheme have not been settled, and indeed the consent of the Secretary of State for Foreign Affairs had not yet been obtained when your despatch of the 26th July was

written.

8. I would point out that what the Corporation ask

to be allowed to deposit under the custodian scheme is coin or bullion. They do not ask for the power to be extended to securities, but they do not wish it to be restricted to coin only. I am not in a position to say, but there may be difficulties in applying the scheme to bullion which would not arise in the case of coin.

I shall be much obliged if I may have a

telegraphic reply to the despatch as soon as possible, so that the necessary arrangements may be made before the annual meeting of the Corporation next February.

I have the honour to be, Eir,

Your most obedient humble servant,

BE Stubbe

Governor, ác.