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Yen were suggested with this object, and in your letter under acknowledgment their Lordships express their willingness to sanction the legalization of the former coin, should that measure still be desired in the Colony. But it appears to Sir MICHAEL HICKS BEACH that the recent action of the United States Government materially alters the aspect of the question with respect to that coin.

The opinion of the Deputy Master of the Mint as to the expense of supplying a British dollar was communicated to the Chartered Mercantile Bank of India, London and China and to the Governors of Hongkong and the Straits Settlements with the object of eliciting an opinion as to the adoption of the Trade Dollar. Sir MICHAEL HICKS BEACH was awaiting the reply to these communications before again addressing their Lordships on the subject, when your letter of the 26th of November was received. Up to this date there has not been any further communication received from the Bank or the Colonies on the subject, but Sir MICHAEL HICKS BEACH would be quite prepared to learn that the views of those who formerly advocated the legalization of the United States Trade Dollar had been considerably modified in regard thereto. The Trade Dollar of the United States being no part of the internal currency of that country, it appears to Sir MICHAEL HICKS BEACH to be with respect to the proposal to legalize it at Hongkong, in the same position as the Dollar of Japan with the disadvantage of being 4 grains heavier that the old Mexican Dollar, which seems to be the standard of value in these parts, while the Japanese Yen purports to be of the same weight and fineness as that well known coin.

4. With regard to the Japanese Dollar, I am to request that you will draw the attention of the Lords Commissioners to the enclosed papers which have been received since the date of the last communication to you from this department, all of which but the first two refer especially to that coin, and also to the accompanying despatches on the subject received at the Foreign Office from Her Majesty's Minister in Japan. I am to request that all these documents may be returned to this Office with your reply to this letter. Their Lordships will perceive that the question of the legalization of the Japanese Dollar in Hongkong has not been allowed to drop, and while it does not appear that the mercantile communities were prepared to recommend the Japanese coin in preference to a British or American Dollar, it may, Sir MICHAEL HICKS BEACH thinks, be inferred from the letters on the subject of the proposed substitution of the Yen by the Japanese Trade Dollar, which accompany Sir W. ROBINSON's despatch, No. 112, of the 25th of April last, and Governor HENNESSY'S, No. 30, of the 20th March, as well as from the documents accompanying Sir W. ROBINSON's despatch, No. 386, of the 2nd November, 1876, which were transmitted to you on the 24th of February, 1877, that they would be glad to accept it, failing other modes of meeting the alleged difficulty. The objection to the legalisation of the Yen is, of course, that, as it is not current in the interior of Japan, there is no strong guarantee for the maintenance of its purity and work-

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