Page:Indian Journal of Economics Volume 2.djvu/401

 and not easy to collect. The consequence is that it goes be a premium in this market, that is t say the notes go to a the Hongkong discount. On rate is above the other hand parity the dollars when will tend to flow. back into Hongkong and the notes will go to a premium in the same market. In practice one speaks of a premium on the silver dollar, not a discount on the notes, and vice versa, for sll transactions are reckoned in notes in spite of he fac ha he dollar is legal .ender. This movemen of silver ou of he colony should reflected in he ael rae, he raio o! exchange he currency This is an nominally between Shsnghsi. currencies, of Hongkong and that. o! exchange between two silver a least, hough we have seen has a paper currency. This ghai and vice versa. The mint par, if one can speak of a mint par where one of the currencies is so abstract, is practically $100--Ts. 71.. In practice, however, here is no min price a which dollors can always be made into taels or vice versa, but s kong dollars the cost of into taels cannot vary by more than moving silver from Hongkong to Shan- that Hongkong really tael, of course, is really s money o! account, for it is the Shanghai weight tael with an allowance, for fineness and a "convention" which counts 98 of these as full payment for a debt f 100. It is as though one should reckon the English currency in Troy ounces of gold of say twenty-three carats, every ninety- eight of such ounces to be considered as one hundred; and iu the meantime the currency to consist in practice of sovereigns, notes, and tokens as before. So in Shanghai the Currency is dollars and subsidiary coins, but accounts are kept in dollars and taels and big transactions carried out in taels. Theoretically, then, the rate of exchange for Hong-