CO129-482 - Public Offices - 1923 — Page 759

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the Government of Hong Kong, and They think it desirable

to set out the position in some detail.

The authorised note issue of the Chartered Bank

before the grant of of India, Australia and China W88, the Tenth Supplemental Charter, limited to $8,000,000, a figure fixed in 1894 on the basis of the then paid up ospital of the Bank, and one not substantially in excess of the limit imposed by the original Charter of the Bank in 1853. Against this issue the Bank was required to deposit in London coin or securities to the extent of

In 1902, following one-third of the authorised maximum. the grant of a similar privilege to the Hong Kong and Shanghai Banking Corporation, the Chartered Bank was empowered to make an excess issue of notes on condition that coin or bullion to the full amount of the 6x0898 (wherever issued) was deposited with the Colonial

The paid Secretary and Colonial Treasurer in Hong Kong. up capital of the Chartered Bank bas since that date been increased to £3,000,000, and upon application being made to Them in 1921 for an increase in the ordinary note issue to that figure, My Lorde saw no reason to dissent from the proposal provided that securities to the full value of the issue beyond $8,000,000 were deposited, and Sir H.J.Read's letter of the 10th August last was taken as endorsing

Then

Their/ 3976

Their view.

Before the grant of the Supplemental Charter

embodying this decision, the position of the Hong Kong

and Shanghai Banking Corporation appears to My Lords to

have been, by comparison, unduly favourable. Under the

Ordinance dated 31st March, 1922 the Corporation was

entitled to issue notes up to $20,000,000 upon the deposit

in London of coin or securities equal to two-thirds of

the authorised issue, and to issue notes in excess of the

authorised issue upon the deposit with the Colonial

Secretary and Colonial Treasurer of Hong Kong of coin or

bullion to the whole value of such ex0988. Provision

was also made that portions of the security last referred

to could, with the approval of the Governor, be kept at

places outside the Colony.

The result is therefore that up to an issue of $20,000,000, beyond which the Chartered Bank do not at

present propose to issue notes, the security deposited is $14,666,666 by the Chartered Bank and $13,333,333 by

the Hong Kong and Shanghai Banking Corporation, and in

both cases the securities are held in London.

My Lorde cannot therefore regard the representations

of the Hong Kong and Shanghai Banking Corporation as well

founded. The Corporation are, as are the Chartered Bank,

entitled/