Sessional_Paper_1884 — Page 517

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I am to state that in Lord CARNARVON's opinion, having regard to the terms of the 6th paragraph of your letter under reply, the Government on the receipt of the memorial now transmitted acted rightly in referring home for further instructions on the subject, and His Lordship would be glad to find that their Lordships could properly recommend that the notes already issued might be permitted to remain in circulation on the understanding that the issue should not exceed some limit to be laid down by the Treasury, and that this permission would under no circumstances be considered a precedent for granting a similar privilege to the other Banking Establishments of the Colony.

In considering this subject, I am to request that their Lordships' attention may also be drawn to Sir A. KENNEDY'S despatch No. 61 of the 1st of April, which forms the subject of a separate communication of even date, as the issue of these small notes appears in some degree to be connected with the present un- satisfactory constitution of the currency of the Colony.

I am, &c.,

R. H. MEADE.

The Secretary to the Treasury.

The Treasury to the Colonial Office.

TREASURY CHAMBERS,

28th November, 1874.

SIB,

In reply to your letter of 6th October last, I am directed by the Lords Commissioners of Her Majesty's Treasury to request you to inform the Secretary of State that my Lords have given their best consideration to Mr MEADE's letter of 16th June, respecting the permission given by the Governor of Hongkong to the Hongkong and Shanghai Banking Corporation to issue One Dollar Notes.

My Lords, looking at the question as one of principle, and also in regard to other Banks trading in the same parts of the world upon whom similar privileges can no longer, according to the terms of their Charters, be conferred by the State, see no reason to modify the advice given in their letter of 6th October, 1873.

But it may be a very different thing not to have granted this permission at all and now to recall it.

My Lords are not informed in what terms the permission was given by the Governor, nor whether the Secretary of State is of opinion that it can be legally recalled. On the whole they can only advise that this information be obtained, and that meanwhile the experiment be carefully watched, and that the Governor be instructed to report from time to time the effect of it. It appears to them that