CO129-523-13 Currency situation 16-6-1930 - 16-6-1930 — Page 54

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silver basis, would have an adverse effect on the

business of the Colony and would tend to drive a

large amount of it away. This is argued very ably

in several memoranda, more especially in that submitted by Mr. Russell on page 101 of the report.

has

The Committee/adopted this view, and I am inclined

to agree with it. At the same time, I do not

think that this view should be accepted without

further examination. China has accepted the

possibility of adopting a gold standard, but it is

very difficult to say when she will be able

to

attain this end. The Kemmerer Report, recently

issued, is an interesting document: it recommends

gradual adoption of a gold basis province by

province, and it may be many years before the

proposals can be completely carried out.

7. I do not think that there can be any

question that, if China eventually adopts a gold

basis, Hong Kong must certainly do the same, and it

is therefore imperative that we should be prepared

for such a change over. I should be glad if the

necessary advice may be obtained early as to the

steps which should be taken in anticipation of such

an eventuality.

8.

Assuming that it is decided that Hong Kong

must retain its existing basis until such time as

China adopts a gold basis, it is necessary to

consider whether the present system can be improved.

It appears doubtful whether, apart possibly from

attempting