AR
4K Weekly Press
714
17 my 231 1930
DELIBERATIONS ON
CURRENCY.
BULK OF EVIDENCE NOW AMASSED.
COMMITTEE PROCEEDING TO REPORT STAGE.
A meeting of the Currency Com- held on May 15, mittee was
A. Stokkink (Acting when Mr. Manager of the Netherlands Trad- ing Society) attended to give evi- dence, but made it clear that he was doing so in a private personal capacity and not as representing his bank.
In Mr. Stokkink's opinion, the currency used in Hong Kong and based on silver is, in the circum- stances, the most suitable for the The present trade of the Colony. situation in regard to it must, how- ever, be considered unsatisfactory because
(a) of the fluctuations to which the price of silver is liable, the risk attending which can, however, be practncally elimi- nated by fixing exchange in time;
(b) of the fact that there is an incalculable premium on Hong above the Kong currency highest silver point, which premium has not yet been effectively controlled, and (c) because there is a discount on the legally recognised coined silver dollar compared with the local bank note. Detriment to Prosperity.
was
a.
With regard to remedies, he con- sidered that as Hong Kong should not change to any other standard so long as China remains on silver basis, no remedy for the fluctuation in the price of silver could be attempted. The premium on Hong Kong currency, however, most unfortunate, as it in- volved the China merchant in a still further exchange risk, and was, therefore, detrimental to the prosperity of the Colony. At least something should be done (and sug- gestions were offered) to prevent the severe fluctuations in this pre- mium, and to bring the Hong Kong dollar gradually down, as near as possible, to its silver basis, eliminat- ing the additional risk which tended to divert trade to Shanghai.
A measure to control the premium (of notes over silver coins) would be that the Government should take over the superfluous coins and pro- hibit the further importation of British dollars, whereby all induce- ment to further minting would stop. The remedies outlined above would give all the stabilisation that trade requires. Any further pro- posal for stabilisation by way of introducing a gold standard is not to be favoured for the time being and is supported only by non-trad- ing interests.
The Committee thanked Mr. Stokkink for his assistance and valuable suggestions.
The Committee has now amassed practically all the evidence request- ed and offered and is proceeding to the report stage.
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