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15. AS REGARDS OTHER PRELIMINARIES, FIRST MT WOULD BE NECESSARY FOR THE NOTE-ISSUING BANKS TO AGREE ANY REVISIONS TO THE IR ARRANGEMENTS FOR PROVEDING NOTES TO THE OTHER BANKS.
17. NEXT IT IS PARTICULARLY HARD TO PREDICT PUBLIC REACTION, SO ALL POSSIBLE CONTINGENCIES HAVE TO BE PROVIDED FOR. THE PUBLIC MIGHT SEIZE UPON THE ASSURANCE OF THE CONVERTIBILITY OF HKD NOTES INTO FOREIGN CURRENCY, BUT FAIL TO APPRECIATE THE CONTINUING CONVERTIBILITY OF DEPOSITS INTO NOTES. IF THAS HAPPENED
ALBENIT THERE COULD BE, SOMEWHAT PERVERSELY, AN INITIAL, SHORTLIEVED, SURGE IN DEMAND FOR HKD NOTES. ADEQUATE SUPPLIKES WOULD NEED TO BE AT HAND.
18. MORE PROBLEMATICALLY, THE PUBLIC NIGHT TEST THE CONVERT KÊILITY, AS THEY PERCEIVE HTS MEANING, OF THE HK NOTES BY DEMANDING FOREIGN NOTES UN EXCHANGE. THAS COULD BE DISCOURAGED TO SOME EXTENT BY PERSUADING THEM OF THE ADVANTAGES OF A FOREIGN CURRENCY DEPOSIT AS OPPOSED TO A BANKNOTE, AND BY DRAWING ATTENTION TO THE LAW CONCERNING THE USE OF FOREIGN NOTES IN HONG KONG. NEVERTHELESS, NT WOULD BE DESHRABLE FOR BANKS TO HAVE PLENTY OF U.S. NOTES AVAILABLE. HT WOULD BE IMPORTANT FOR THE SCHEME TO WIN MAXIMUM CREDIBILITY: ANY STORMES OF BANKS NOT BEING ABLE TO HONOUR THE SUPPOSED CONVERTIMITY, AS INTERPRETED BY THE MAN IN THE STREET, WOULD BE MOST UNFORTUNATE.
COST TO GOVERNMENT.
19. AFTER ANY SHORTLIVED HIMHTHAL SURGE, AT S LIKELY THAT THE NOTE-USSUE WOULD CONTRACT (OR AT LEAST BE LESS THAN IT OTHERWISE MIGHT BE) DURIG THE PERIOD OF ADJUSTMENT TO THE NEW RATE. THE WORST SCENARIKO WOULD BE FOR THIS CONTRACTION TO CONTINUE, IMPLYING A CONTINUAL LACK OF CONFIDENCE IN THE STABILITY OF THE CURRENCY, UNTAL (IAN THEORY ANYWAY) THE HKD MONEY SUPPLY (FOR WHICH CASH NS THE ULTIMATE RESERVE) DISAPPEARED TO ZERO, ALTHOUGH SUCH DEMONETISATHON MIGHT BE NO BAD THING AF CONFIDENCE WAS INDEED SO
PERSISTENTLY POOR.
20. THE COST OF ANY REDUCTION IN THE NOTE ISSUE JA THE LOSS OF SEIGNORAGE, WHICH MIS ACCEPTABLE ME AT REFLECTS A RETURN OF MONETARY DESCIPLINE: ANNOYING, BUT ACCEPTABLE, FIT SAMPLY REFLECTS MORE ECONOMICAL USE OF CASH: AND STILL MORE ANNOYING, BUT HNE VIUTABLE, HE MT ARISES FROM A SHIFT TO USE OF OTHER CURRENCHES AND HENCE DIVERSION OF SEIKONORAGE TO ANOTHER GOVERNMENT (UNLIKELY UNLESS THE PROHHSATION ON USE OF FOREIGN NOTES HIS REPEALED).
21, ADDYT HONALLY, GOVERNMENT MAY RESENT PEDEEMING CHS FOR FORE: HON CURRENCY AT A RATE LESS FAVOURABLE TO GOVERNMENT THAN THE LAST PRE-SCHEME MARKET RATE. HOWEVER, JUDGED OVER A LONGER PERIOD, GOVERNMENT WOULD PROBABLY FIND THAT IT HAD MADE HANDSOME EXCHANGE GAVAS FROM WIVESTING CH PROCEEDS.
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