Sessional_Paper_1884 — Page 524

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In the event of such an issue being undertaken, it would of course be necessary to withdraw the power possessed by the Hongkong and Shanghai Bank in this respect which, as you are aware from previous correspondence, was granted by your predecessor without reference to the Secretary of State, and was approved only conditionally and temporarily.

Governor HENNESSY, C.M.G.

I have, &c.,

R. G. W. HERBERT,

for Secretary of State.

The Colonial Office to the Treasury.

DOWNING STREET,

SIR,

13th January, 1879.

I am directed by the Secretary of State for the Colonies to acknowledge the receipt of your letter of the 26th of November last, No. 15,076, on the subject of the currency of Hongkong and the Straits Settlements, and the desire of the Hongkong and Shanghai Bank to establish a branch at Singapore.

2. The general question of the currency of Hongkong turns, as you state, on two points: (1) the fear of a deficiency of the only coin which is unlimited legal tender in the Colony, and (2) the complaint against the currency of coins mutilated by the Chinese "Chops."

3. First, with regard to the provision of a sufficient supply of coin, it was proposed, as their Lordships are aware, to coin a British dollar similar to that issued by the old Hongkong Mint. This suggestion found much favour in Hongkong and the Straits Settlements, and it would have met with the approval of the Secretary of State, subject, as stated in previous correspondence, to the all important question of cost, but Sir MICHAEL HICKS BEACH desires me to state that the calculations of their Lordships' skilled adviser, the Deputy Master of the Mint, as to the cost of a dollar coined in this country for the use of the Colony were at once accepted as conclusive, and it appears therefore that the supply of a British dollar as a remedy for the alleged evil may be put out of consideration. Neither is Sir MICHAEL HICKS BEACH at present prepared to entertain the question of the re-establishment of the Hongkong Mint which has been suggested, but which he assumes, as their Lordships will perceive from the enclosed correspondence, would be an even still more costly way of providing for the wants of the Colony.

There remains the possibility of meeting the alleged difficulty by the introduction of a coin of some Foreign State. The Lords Commissioners of the Treasury will remember that the Trade Dollar of the United States and the Japanese Dollar or