CO129-469 - Governor Sir Stubbs - 1921 [9-12] — Page 281

Part of

security for excess note issue may be kept in such plices and

under such

sundstigus

anthe

Governor may approve.

2-

uial Secretary and Colonial Treasurer exclusively for the redemption of such bills and notes, wherever the same may have been issued: Provided neverthe less that nothing herein contained shall exempt the company from the operation of any lawe restricting or regulating the issue of bills or notes in the Colony or in any place outside the Colony where the company has banks or branch banks.

(4.) Notwithstanding anything con- tained in sub-section (3) of this section, portions of the security in coin or bullion provided for by the said sub-section may be kept deposited in such places out- side the Colony, with such pergons, to such amounts, and subject to such con- ditions, as may at any time and from time to time be approved by the Governor.

3. Section 22 of the principal Ordinance is amended Amen ment as follows:-

(a.) "50,000,000" is substituted for "20,000,000"

in the eleventh line thereof.

(3.) "20,000,000" is substituted for "10,000,000"

in the fifteenth line thereof.

(a.) The second proviso thereto, that is to say, all

the words after the words "herein provided

in the eighteenth line thereof, is repealed.

of Ordinance

No. 3 of 1866,

K. 22.

3

4. The comparison between the existing law and the new Ordinance can also be made in the following way.

as regards the first $20,000,000 of the total issue.

Security under present law: ---

¦ of $10,000,000 in coin or securities, $5,000,000 in coin or securities. $5,000,000 in coin or bullion,

Security under new Ordinance :—

₫ of $20,000,000 in coin or securities.

It will thus be seen that the value of the security will not be altered, but that the Corporation will be relieved from the necessity of keeping coin or bullion against any part of the first $20,000,000 of the total note issue.

5. It will be noted that one provision disappears in the proposed new section 13, ie, the requirement of the latter part of the present section 13 (1), that the Corporation must keep at each of its establishments an amount of coin or bullion equal in value to one-third at least of the notes issued from such establishtuent and actually in circulation. It is considered that this may be left to the discretion of the Corporation.

6. Sub-section (4) of section 13 will enable the Cor- poration, subject in all respects to the approval of the Governor, to keep, in places outside the Colony where notes may be issued by the Corporation, part of the excess note issue security, which most of course be in coin or bullion. The bringing of this section into practical operation is of course dependent upon the arrangement of a satisfactory scheme for the custody of

the coin or bullion.

Objects and Reasons.

1. The objects of this bill are:-

(a) To give the Corporation power to increase ita capital, with the consent of the Governor, up to $60,000. The present limit is $20,000,000.

(b) To increase the limit of the ordinary note issue from $15,000,000 to $201,000,000,

(e) To revise the requirements of the law as to the security to be held against the ordinary Rote issue,

(d) To enable the Corporation to keep at certain places outside the Colony part of the security bell against the excess note issue.

2. Under the existing law the excess note issue must be fully covered by coin or bullion, under the control of custodians independent of the Corporation, and this will be so under the new Ordinance also. In future, however, the excess note issue will mean any issue in excess of $20,000,000 instead of $15,000,000 as at pre- sont.

3. The present requirements of the low as to the security to be held against the ordinary note issue are that coins or securities approved by the Secretary of State must be kept with the Crown Agents, or with trustees appointed by the Secretary of State, equal in value to of the first $10,000,000 of the issue, and that the remaining $5,000,000 of the issue must be fully covered by such coin or securities, so deposited. The new Ordinance will provide simply that of the ordinary issue, which issue will in future amount to $20,000,000, must be so covered.

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