CO129-474 - Governor Sir Stubbs - 1922 [1-4] — Page 376

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3.

(a)

To enable the Corporation to keep at certain places cutside the Colony part of the security

held against the excess note issue.

Under the former law the excess note issue had to be fully covered by coin or bullion, under the control of custodians inde- pendent of the Corporation, and this is so under the present 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 formerly.

4.

The former requirements of the law as to the security to be held against the ordinary note issue were that coin or securities approved by the Secretary of State had to be kept with the Crown Agents, or with trustees appointed by, the Secretary of State, equal in value to one-third of the first $10,000,000 of the issue, and that the remaining $5,000,000 of the issue had to be fully covered by such coin or securities, so deposited. The present Ordinance provides simply that two-thirds of the ordinary issue, which issue will in future amaunt to $20,000,000, must be so covered.

5. The comparison between the former law and the present Ordi- nance can also be made in the following way, as regards the first $20,000,000 of the total issue. Security under former law: -

1/3rd of $10,000,000 in coin or securities.

$5,000,000 in coin or securities.

$5,000,000 in coin or bullion.

Security under present Ordinance; -

2/3rd of $20,000,000 in coin or securities.

It will thus be seen that the value of the security la not altered, but that the Corporation is relieved from the necessity of keeping coin or bullion against any part of the first 220,000- $20,000,000 of the total note issue.

6.