CO129-519-7 Hong Kong currency- minting of silver dollars 1-11-1929 - 5-2-1930 — Page 14

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a rather remarkable repudiation on the part of

Government of its own legal tender currency. The

natural result of this odd Hong Kong arrangement was

that a premium of something like 15 was established

in favour of notes. Recently, the banks and the

Government seemed to have come together and made up

their minds that the preference for notes over silver

ought to come to an end, and consequently the

"Commercial Convention" was cancelled, with the

result that the premium on notes rapidly disappeared.

For some little time there was apparently an

opportunity to make money by buying silver, taking it

to the mint, or one of the Indian mints, for coinage

into silver dollars, and shipping the dollars to

Hong Kong.

in this now.

But I doubt whether there is much money

We understand that large orders were

placed for the minting of Hong Kong dollars, and will

certainly go on being executed for a month or two.

These orders are said to have been placed mainly by

foreign firms. The Manager of the Chartered Bank

of India told us that he had done some of this

business himself. The other principal elements in

the situation are the very low price of silver, which

is now the lowest on record, but has probably not

reached bottom, and the adoption of a gold basis

currency in Saigon.

Chinese Maritime Customs have

also recently started collecting customs duties on a

gold basis. I am not sure about details of this,

but my impression is that in the case of specific

duties they are not accepting silver at its face

value