Chartered Banks, the circulation of banknotes in Hongkong averaged only one and a half million dollars. Now in June 1872, the Hongkong and Shanghai Bank obtained the Governor's permission to issue one dollar notes and thus to supply a much felt want. The Bank accordingly issued (October, 1872) such notes, of which there were, twelve months later, about $175,000 in circulation. This raised the total of banknotes in circulation in 1873 to three and one fourth million dollars, and in 1874 the circulation of banknotes reached three and a half millions. But in December, 1873, the Governor received an intimation that the Lords Commissioners of Her Majesty's Treasury disapproved of the issue of one dollar notes on the ground that these notes would be largely in the hands of the poorest Chinese who might be even more subject to panics than the mercantile classes. The Governor was instructed to order the withdrawal of these notes unless serious public inconvenience should result from such a course. When the Governor accordingly called upon the Bank (February, 1874) to show cause why the one dollar notes should not be called in, the whole community took up the matter and a numerously signed Memorial, supported by a special resolution of the Chamber of Commerce, was forwarded to H.M. Government (March, 1874) in favour of the retention of these one dollar notes.
There were, at the beginning of this period, three new silver dollars competing for public favour, viz., a new Mexican dollar, the American trade dollar and a Japanese dollar (yen). The Chinese shroffs and traders of Hongkong and Canton having formed a combination, with a view to reject the new Mexican dollar, the Viceroy of Canton had it assayed (March 18, 1872) and issued (November 30, 1872) a proclamation which was published in the Hongkong Government Gazette (December 7, 1872). It was thus officially announced, that the new Mexican dollar consisted of 9 parts pure silver and 1 part alloy; that to pay 100 taels' weight of pure sycee, it would be necessary to pay 111·11 in new Mexican dollars; that 100 new Mexican dollars are equal to 101·41 old Mexican dollars, the new Mexican dollar
