Sessional_Paper_1884 — Page 535

SIR,

28

J

Treasury to Colonial Office.

TREASURY CHAMBERS,

30th July, 1880.

I have laid before the Lords Commissioners of Her Majesty's Treasury your letters of 27th May and 14th ultimo, enclosing, with reference to previous corres- pondence, a despatch from the Administrator of the Straits Settlements, respecting the establishment in that Colony of a branch of the Hongkong and Shanghai Bank, together with draft of the Ordinance which the Administrator has caused to be prepared for legalizing the establishment of such Branch Bank at Singapore,

and hereafter if desirable in the other Settlements.

My Lords concur fully in the opinion expressed by the Secretary of State, that in view of the contemplated issue of One Dollar Notes by the Government of Hongkong, a measure which will involve the withdrawal from the Hongkong and Shanghai Bank of their existing privilege of issuing notes of that denomination, it is desirable to keep in hand some concession to the Bank as a set-off against the abolition of this portion of their right of issue, and they would therefore think it unadvisable to sanction the proposed Ordinance. They may remind the Secretary of State that the Ordinance of 1866 establishing the Bank, contemplates (Sec. 4) the sanction of the Treasury being given to the establishment of branches in Penang and Singapore, and they need hardly add that that sanction should be obtained before an Ordinance of the Government of the Straits Settlements authorising the establishment of branches in those Colonies is passed.

As regards the relaxation of the condition respecting the detention of a specie balance at the head establishment, that point must be considered on its own merits, and my Lords do not think that the description given in the letter enclosed in the Colonial Office letter of 7th February, 1876, of the conditions of the Charters of the Oriental and Mercantile Banks with respect to the retention of specie is quite accurate. But, without dwelling on this point now, my Lords would repeat their opinion that all the questions connected with the Hongkong and Shanghai Bank should be considered together, including always the privilege unwisely granted to them of issuing small notes.

The Under Secretary of State,

Colonial Office.

I am, &c.,

WILLIAM LAW.