Fundamentally Hongkong's currency is identical with that based on the Chinese silver dollar. Nevertheless, we see the Intter quoted at. and below Tls. 72, while Hongkong dollars cannot be had under Tls, 863. This means premium of over 20 per cent. The premium exists on banknotes only. Although the British dollar is the recognized egal unit at Hongkong, and as such ega} tender, silver dollars are not accepted down South, even in pay ment of taxes; banknotes or cheques are demanded instead. According to an old law Mexican dollars also legal tender at Hongkong. Janybody attempting to import into Hongkong 100,000 Mexicans, with the idea of putting them into cireul-Jation there at par, would have to face at least as many obstacles. as the importer bringing a. shipment }of 100,000 ladies hats of the coely: Rineties of the past century. into Hongkong for quick sale. it is a fact that, whereas today local $1.20 equals ical with the Chinese dollar) has now the same value as the Japanese yen.
To-day the Chinese - dollar could have been exchanged here for say 1s/73d.
Hongkong della Effect on Imports:
This means that goods imported into Hongkong from Europe or America can be landed there much more cheaply than here. But as the consumption of goods' within the limits of Hongkong is but very small, the colony is faced with the necessity of exporting the same goods to the Chinese main land, And here formidable obstacles be-
-|come apparent, for the cost in terms of Hongkong dollars becomes prohibitive. The existing anomaly is undoubtedly harmful to the trade of Hongkong, and conditions call for drastic changes, 1
The problem of the Hongkong dollar's disparity is of a distinctly complicated nature, requiring a deep study of the circumstances whicn brought the premium about and of the effects on commerce in general, Reuter's Report Hongkong, Oct, 7.
The opinion is expressed that the decline in local exchanges is due to the efforts of merchants, with the ce-operation of the Government and the banks, to bring down the long-standing abnormal premium of around 20 per cent. on Hongkong notes, It is reported that the Hongkong Shanghai Banking Corporation is buying all currencies in order to reduce this premium, As regards the future, the opinion is expressed that the Government might allow the free circulation of silver. If the Government has a definite potiey, still lower rates be seen; otherwise the market will most likely react, A leading Chinese banker that the market at the present time is extremely artificial and that it is being manipulated by a leading bank for the good of the Colony.
Most of the banks have stopped selling and have warned merchants to book their exchange in order to prevent losses, This Chinese banker thinks that* even lower rates will be seen—Reuter,
Text read from the printed page and cleaned; old type leaves the occasional error.