Sessional_Paper_1908 — Page 118

Questions.

Answers.

scribed or under licence) is to change it at once for legal tender the object being to create a large demand for legal tender and so to rehabilitate the Hongkong coinage.

17. Will this not mean a large profit to the money changer class? and (as above suggested) should not this be simultaneously met by a heavy tax on this class?

18. Would the Committee agree that the prohibition of circulation should be temporarily deferred in order to prevent (a) dislocation of trade (b) hardship to ignorant and poor per- sons and undue interference with the individual and (c) influx of Hongkong coin from China which even if prohibited would in such circumstances be largely smuggled in?

WITHDRAWAL OF HONGKONG COINS FROM

CIRCULATION BY GOVERNMENT.

6+

19. The Majority Report approves this course, with however the very important pro- viso that "it will be a failure unless prohibition is enforced ". What does prohibition " here. connote--does it mean prohibition of import only and of both Chinese and Hongkong coins or the former only? The Minority apparently consider withdrawal by Government unneces- sary? and consider that it would simply cause Hongkong coin to be replaced by Chinese-in which view I understand the Majority to concur in view of the proviso referred to. Is the Committee then unanimously opposed to the present policy of the Government unless prohibition is enforced?

we made our coins more valuable than the Canton ones a large percentage of those held in China might come back to Hongkong unless their import was prohibited, and this would mean repudiation which Committee are unanimously opposed to. (The course suggested by the Minority is to bring about a gradual and simultaneous re- duction of the discount on both Hong- kong and Canton sub. coins.)

Not necessarily so as competition could

to a certain extent be relied upou.

The Minority, while disagreeing with prohibition of import and circulation, would remark that, to render the first effective, the second must be introduced simultaneously, after sufficient notice has been given to the public that both import and circulation are to be pro- hibited. To at once prohibit the import of Canton sub. coins and to temporarily defer prohibition of their circulation would give big holders of these coins an opportunity to unload their stock to those "ignorant and poor persons".

First part to be replied to by the Majority. The Minority consider withdrawal by Government uunecessary if their proposals are adopted and prove successful. If the import and circula- tion of Canton sub. coins are prohibited, as recommended by the Majority, a considerable influx of Hongkong sub. coins from the Two Kwang Provinces may be expected and, in order to bring the coins up to par, withdrawal by Government would be necessary until the demand overtook the supply. Un- til a final decision is arrived at the Minority consider that the Government should continue to withdraw the coins received as revenue and retain them in the Colony.

Hongkong, 10th December, 1907.

D. R. LAW.

A. G. WOOD.

J. R. M. SMITH.