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INTERIM REPORT OF CURRENCY COMMITTEE.
64
It is now possible to give some very brief indication
of the nature of the replies which the Currency Committee
intends to give to its terms of reference.
The Committee agrees that the present currency is
the most advantageous for the purposes of the trade of the
colony so long as China uses a currency based on silver.
The Committee remarks that the scope of its enquiry in this
respect was confined by the terms of reference to trade.
The Committee finds that the present currency system
suffers from blemishes because of the facts that a premium
exists on the bank note over the silver dollar in exchange
and that the silver dollar is a most inconvenient medium
being difficult to carry, handle and store, which
disadvantages tend to put it at a discount.
Some
dissatisfaction was also expressed to the Committee
regarding the methods of note issue prevalent in the present
system.
The Committee is disposed to advise remedies by a
more extended use of silver bullion and also by discouraging
the deposit of dead weight currency in the Colony through
adjustment of the rate of interest to suit the needs of the
moment. Some suggestions may also be made for more control
of note issue. A Government note issue is not however
favoured. Various minor remedies will be mentioned.
Stabilisation could only be effected on a gold basis
and is not therefore favoured as it would divorce the
Colony's currency from that of China. It is pointed out
that to introduce a currency on a gold basis present
holdings
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