572526-1930-Report-of-Currency-Committee-1930 — Page 2

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THE HONG KONG GOVERNMENT GAZETTE, AUGUST 1, 1930.

3. All written evidence we have received, and all memoranda previously writ- ten on the subject, to which we have had occasion to refer in this report, are printed as annexures in Part III. The minutes of those meetings at which oral evidence was heard form Part IV. To complete the data before us, and for ease of reference, we have appended in Part II all relevant Hong Kong ordinances and extracts from the supplemental Charters of the Chartered Bank, as well as a copy of the Order-in- Council by which the present currency system of the Colony is established.

Historical.

4. Whilst Hong Kong was still a settlement under Her Majesty's Plenipoten- tiary and Chief Superintendent of the Trade of British Subjects in China, a hetero- geneous collection of coins consisting of Spanish, Mexican and other dollars, East India Company's rupees and copper Chinese cash was proclaimed the circulating me- dium.

5. Shortly after the island was constituted a Colony, Mexican and other Re- publican dollars were on the 27th of April, 1842, proclaimed the standard currency of the Colony in all Government and Mercantile transactions.

6. On the 1st of May, 1845, by proclamation the gold, silver and copper coins of the United Kingdom, as well as Company's coins, were admitted to circulate side by side with silver dollars This system persisted for some years, but as Government accounts were kept in sterling and revenue was received in coins of all kinds, its inconvenience led first of all in 1853 to an abortive proposal to oust dollars in favour of a sterling currency, and finally in 1863, to a proclamation whereby Mexican dol- lars and other silver dollars of equivalent value that might from time to time be au- thorised became the only legal tender of payment.

7. It is interesting to note that about this time the coining of a new Hong Kong dollar was undertaken in Hong Kong, but lapsed after about $2,000,000 had been minted. This type of dollar is now obsolete and so rare as to be considered a curio. A new type, the British Trade dollar, afterwards came into popularity and its coinage was undertaken in India and London.

8. The present currency of the Colony was established by an Order-in-Council proclaimed in 1895, which we have reprinted in full in Part II, and which explains fully the nature of the legal tender coins. It is noteworthy that the Mexican dollar is made the standard, to which the British or any other dollar should conform if it is to be accorded equality of status. The Order-in-Council is noteworthy also as ordain- ing that, in the absence of express agreement to the contrary, in all contracts and transactions involving liability to pay money, payment should be made in the standard, coin of the Colony.

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9. There are practically no restrictions on the minting of British dollars by any one who is willing to pay the seigniorage. It is estimated that in all about 230,000,000 British dollars have from time to time been minted, many of which must by now have gone into the melting pot. Mexican dollars are not now minted, but are held as deposits against the issue of notes, and China must have absorbed a number of them. Of Mexican dollars also a large proportion must by now have been melted down. When the British Silver dollar was re-admitted into free circula- tion towards the end of 1929, its minting and importation into the Colony were resum- ed, and it is estimated that 24,000,000 of these have come in since that time, as well as $6,000,000 Mexican from Shanghai It is estimated that another 10,000,000- 15,000,000 British dollars may arrive in the near future. The total amount of coined dollars of various kinds deposited in the custody of the Hong Kong Government against note-issue by the three issuing banks was $57,600,000 at the end of April, 1930. There are also subsidiary coins issued by the Hong Kong Government in circulation sufficient in amount for the purposes required. The nominal amount of these in cir- culation at the end of the year 1929 was $17,914,370 and their market value stood practically at par; the amount of subsidiary coins in stock at the same date was about $1,800,000.

Bank Notes Issued in Hong Kong.

10. We have reprinted in Part II the Hong Kong Ordinances governing the ordinary and excess issue of notes by the Hong Kong and Shanghai Banking Corpora- tion and the Mercantile Bank as well as those portions of the Charter and Supplemental Charters of the Chartered Bank, which govern the note issues of that institution and the security therefor. The latest date up to which these banks are at present em-

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