CO129-504-10 Currency system- premium on bank notes as compared with British silver dollars 10-1-1927 - 30-8-1927 — Page 15

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During the last two months there has been a distinct

improvement in import business, and this is reflected in the

fact that whereas on 31st March last the premium of the Hong Kong

Bank note over the laying down cost of the British dollar was

These figures are based

7.964%. today it is only 5.642%. These figures

an the very lowest possible charges, namely Seigniorage in

London at £2.5/- per $1000 & 5 weeks' interest at 5% p.a. making total charges 3.477.7%.

The comparative positions just mentioned are, however,

based on the interbank rates on 31st March & today, but if based

on this Bank's official selling rates the result is a premium of 6.303% on 31st March & a premium of 4.284% today. It is

hardly necessary to point out that the P. & 0. Bank showed the

worst position, namely the premium based on the interbank rate.

In abnormal times abnormal positions arise, & the

remedy for the position complained of by the P. & 0. Bank lies,

not in arbitrary restrictions, but in a restoration of peaceful

trade with China.

I apoligise for writing at such length, but the matter

as you say, is a very important one, I would suggest that if

the Colonial Office wish for further information, they have

easily at call Sir Newton Stabb and Mr. A. H. Barlow, who will, I

feel sure, be only too pleased to give any information required.

Sir Newton Stabb was 14 years in the Head Office of this

Bank at Hong Kong, of which he was Chief Manager for over 10

years,