ENG-1954 — Page 64

HONG KONG ANNUAL REPORT, 1954

notes to replace the silver dollars in circulation; these are backed by a Note Security Fund, which maintains its assets partly in sterling and partly in Hong Kong dollar bank accounts. The

The Government also issues subsidiary coins to the value of 54, 10¢ and 50¢.

Since 1935 the value of the Hong Kong dollar has been maintained at approximately 1/3d. sterling, although the banks may deal with the public at a few points on either side of this rate both to allow for a profit margin and, to a slight extent, to meet fluctuations in demand and supply.

The total currency in nominal circulation at 31st December, 1954 was made up as follows:-

Bank note issue

Government $1 note issue

Subsidiary notes and coin

$727,490,640

26,891,500

16,469,783

The Colony has been a part of the sterling area since August 1941. Exchange Control is administered under powers conferred by the Defence (Finance) Regulations, 1940. The system of control is based on that in force in the United Kingdom, with some modifications necessitated by the position of Hong Kong as an entrepot.

Banking

The Banking Ordinance provides that no institution may engage in banking without obtaining a licence. from the Governor in Council to do so, and that each bank must publish an annual balance sheet. At the end of 1954 there were 94 licensed banks of which 26

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