Sessional_Paper_1908 — Page 109

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SUBSIDIARY COIN COMMITTEE.

Copy of Chairman's Report.

1. Subsidiary coinage is solely for the pur- pose of the internal retail trade of the Colony, and other small transactions.

2. It is true that in past years the Houg- kong subsidiary coinage played a considerable part in the trade with Canton but judging from the trouble that has arisen in the last two years it would appear to have been an economic mis- take to have directed it from its true purpose.

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3. Just what quantity may from time to] time be required is a matter of experience but the chief test is the value of the coin in the open market.

4. It may, however, be taken that $5 per head is sufficient in a community whose stand- ard coin is $1 and where the legal limit of tender is $2.

5. Taking roughly the population of the Colony at 400,000 it would therefore, appear that a total of $2,000,000 at any one time is sufficient and assuming that the life of a coin is 20 years (which owing to past circumstances cannot yet be verified) a supply of $100,000 a year would be ample under present circum-

stances.

6. The issue outstanding during the last 40 years is $40,000,000 of which about $30,000,000 were issued in the ten years prior to 1905 and the coinage has been during the past two years at a discount varying from 9 per cent to 4 per cent.

7. From these facts it may be justly infer- red that there is in existence under present circumstances a large over-issue of Hongkong subsidiary coinage.

8. For reasons unnecessary to state in detail it is obvious that it is desirable to rehabi- litate the currency of the Colony and it only remains to consider the best practicable means for this purpose.

9. There is no necessity to demonetise the existing currency as any scheme for the sub- stitution of a new coinage must necessarily prove more expensive than the rehabilitation of the present coinage unless, indeed, it is pro- posed to repudiate a proportion of the latter, a course which is most objectionable as tending to lower the credit and honour of the Colony.

Annotations by the Undersigned.

Admitted. The same may be said as re- gards Canton but throughout the Two Kwang provinces it practically serves as the currency.

Its use can hardly be limited unless ex-

port prohibited.

Admitted if their export is prohibited.

Statements of fact.

Admitted as regards the requirements of

the Colony.

Granted.

Agreed that there should be no repudia-·

tion.