CO129-504-10 Currency system- premium on bank notes as compared with British silver dollars 10-1-1927 - 30-8-1927 — Page 28

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just should not be allowed to exceed the equivalent of the cost of minting (including seigniorage) and bringing to the Colony

British silver dollars from English bar silver.

If it does not suit the Banks issuing notes to provide

additional currency within this limit of premium it would then

be open to other institutions to effect the minting and import

of currency, and the upper bullion point would be established at

approximately double the limit of premium fixed by Government

because other institutions in importing currency would have to

bear the costs thereof and in addition the market rate ofdiscount

(within the limit we suggest) on the coins when they arrive.

J

It is therefore submitted that in order to correct the

fault above described it should be laid down by Government.

That the limit of discount at which Banks must receive

British dollars in exchange for their notes shall not be greater

than the limit to be fixed by the Governor from time to time and

published in the Gazette, (six weeks notice of changes should be

given). The limit of discount to be fixed by the Governor to be the equivalent of the estimated cost of minting and bringing to Hong Kong British dollars from English bar silver.

(Figures are appended which show this limit to be now 31%)