Sessional_Paper_1884 — Page 549

Enclosure 6.

For the Honourable the Acting Colonial Secretary.

1. In compliance with your minute of the 9th instant on C.S.O. No. 2603, I beg to report as follows on the subject of the issue of One Dollar Notes by the Government.

2. First of all, I would add to the statements of the Military, Naval, and Com- mercial authorities, which are already before the Government, my own experience during fourteen years in three Government Departments where money is constantly passing, viz.: the Harbour Department, the Post Office, and the Stamp Office. In all these Offices the want of Dollar Notes is severely felt. The use of Silver Dollars leads to delay, disputes, and to a system of petty money-making on the part of the native cashiers employed. They put away all the first-class coins they get, and will inflict any inconvenience on the public rather than part with them. The Head of the Department is powerless in face of the Shroff's stolid No got. It is impossible

to prove

that he has dollars, whatever one may suspect. Of course with notes this temptation does not exist, as one note is not worth more than another.

3. It is the practice in the Post Office to prepare the pay for each employé on the last afternoon in the month, so as to avoid delay and running about for change the next morning. But, during the past two years, I have repeatedly been unable to get the twenty or thirty One Dollar Notes necessary to pay the postmen, messengers, and boatmen. Only last month I could not get a single one.

4. The remedy would seem to be for the Government to issue a sufficient number of One Dollar Notes. The Government Note should be smaller than the present One Dollar Note, so as to be, by its mere size, at once distinguishable from notes of higher values. The best size would be about 6 x 3 inches. The notes should be printed in the best and safest manner known, on very durable paper.

5. I cannot see why the Hongkong & Shanghai Bank should not, if it chooses, be allowed to continue its present issue of One Dollar Notes side by side with those of the Government, the present inspection of the Bank's bullion reserve being of course continued. The Government has met with much ready co-operation of all kinds from the Bank, and would lose, moreover, about $1,500 a year in Bank Note duty were these notes withdrawn. There will not be a note too many. This however is a question of detail which does not affect my main suggestion.

6. The Government issue might, I consider, be advantageously extended to at least $1,500,000. That the Colony, with its increasing Chinese population, will absorb quite as much as that, I have not the least doubt, and it must be remembered that a Government Note will be more readily accepted at Canton and the ports of China than one issued by a Bank.

These notes would become a local currency by no means restricted to Hongkong.

7. A million and a half may seem a large issue (after all it is only about £250,000). I will venture therefore to support it on other grounds, stating plainly that whatever merit attaches to the suggestion I am about to make belongs entirely