MERCANTILE BANK NOTE ISSUE ORDINANCE, 1911

MERCANTILE BANK NOTE ISSUE ORDINANCE, 1911

No. 59 of 1911, incorporated in No. 10 of 1911.
No. 60 of 1911, incorporated in No. 1 of 1903.
No. 61 of 1911, incorporated in No. 19 of 1911.
No. 62 of 1911 and No. 63 of 1911, incorporated.

No. 64 of 1911, incorporated in No. 1 of 1872.


No. 65 of 1911.

An Ordinance to provide for the issue by the Mercantile
Bank of India Limited of bills and notes payable to
bearer on demand.
[29th December, 1911.]

1. This Ordinance may be cited as the Mercantile Bank
Note Issue Ordinance, 1911.

2. In this Ordinance,

(a) Company means the Mercantile Bank of India,
Limited, whose chief office is in Threadneedle Street, London,
England.

(b) Current coin means coin lawfully, current in the
Colony.

(c) Notes means bills and notes payable to bearer on
demand in current coin.

3.-(1) Subject to the provisions of this Ordinance, it shall
be lawful for the company to make, issue, re-issue and
circulate notes in the Colony.

(2) Such notes shall not be issued for any other sum than
the sum of five dollars, or some multiple of such sum.

(3) Except as fied in section 6, the total amount of
such notes actually in circulation shall not at any time exceed
the amount of the capital of the company actually paid up.

* As amended by Law Rev. Ord., 1924.



If the company issues notes in excess of the amount
authorised by the provisions of this Ordinance, it and the
manager of its office in the COlony shall each upon summary
conviction be liable to a fine not exceeding fifty dollars a day
for every day during which such excess of any sum not
exceeding ten thousand dollars shall continue, and to a
urther fine not exceeding fifty dollars a day for every day
during which such excess shall continue for every complete
additional sum of ten thousand dollrs in notes so issued
in excess.

(4) Such pat of the books of the company as any contain
any entry reltaing to the notes issued or to be issued by the
company or relating to the amount of such notes in circulation
from time to time, or any account, minute, or memorandum
in the possession of the company or of any person in its
employ, the sight or inspection whereof may tend to insure
the rendering or taking of true accounts for any period of
the average amount of such notes in circulation or to test
the truth of any such account, shall be open for the inspection
and examination at all reasonable times of any person
authorised in that behalf in writing signed by the Treasurer.

Every such authorised peson shll be at liberty to take
copies or extracts from any such book, account, minute, or
memorandum.

If the company or any person in its employ keeping any
such book, account, minute, or memorandum, or having the
custody or possession thereof or power to produce the same
shakll, on demand made by any such authorised person
showing if demanded his authority in that behalf, refuse to
produce any such book, accout, minute, or memorandum to
him for his inspection and exaimination or to permit him to
inspect and examine the same or to take copies thereof or
extracts therefrom, the company and such person in its
employ shall each upon summary conviction be liable to a
fine not exceedig five hundred dolllars:

Provided that the Treasurer shall not exercise or cause to
be exercised the powers aforesaid without the consent of the
Governor.

(5) Such notes shall not be legal tender but shall be
redeemable at the office of the company in the Colony in
current coin which is unlimited legal tender in the Colony.































4. The company shall deposit and at all times keep
deposited with the Crown Agents securities to be approved
by the Secretary of State to in amount equal in value to the
face value of the notes in circulation with the addition of
five per cent. of such value ; or at its option the company
shall deposit and at all times keep deposited with the
Treasurer coin whitch is unlimited legal tender in the Colony
to an amount equal to the face value of the notes in circula-
tion ; or all its like option the company shall deposit and at
all times keep depostied securities, so approved as aforesaid,
with the Crown Agents and coin, which is unlimited legal
tender in the Colony, with the Treasurer, in which case the
amount of such securities shall be equal in value to the
difference between the amount of the coin deposited and the
face value of the notes in circulation with the addition of
five per cent. Such securities and sii(.h coin shall be itudel.
the control of the Treasurer and shall be held by the Crown
Agents and the Treasurer respectively as special funds
exclusively availabel for the redemption of such issue of
notes, and in the event of the company being wound up such
secutities shall te sold and the proceeds of sale, together
with any such coin aforesaid, shall be applied so far as
necessary towards the redemption of the notes outstanding.
Nothing in the foregoing provision shall prejudice the rights
of the holders of notes in the event of such proceeds of sale,
together with any such coin as aforesaid, proving to be less
than the face value of the notes outstanding, but if such
proceeds and coin amount to more than such face value the
shall be paid over to the company.

5.-(1) There shall be published in the Gazette every
month, a statement (to be rendered by the company on the
first working day of each month.) of the face value of the
notes outstanding, and of the securities and coin held against
these notes. The statement shall show the nominal value of
such securities, the price at which they were valued on
deposit and also the, latest market price of such securities.

(2) If for two consecutive months the said market price
plus the valne of the coin (if any) deposited with the Treasurer
should indicate a selling value less than the amount required
by section 4, he shall demand that all notes returned to the
company shall be retained and not re-issued until the amount

* As amended by No. 4 of 1913.



so required is reached, or at his option he shall demand the
deposti of addistional unlimited legal tender coin or securities
sufficient to raise the selling value of the securities plus the
value of the coin (if any) already deposited to the amount so
required:L and the company shall comply with such demand.
If, however, for three consecutive months the sid market
price indicates a continued and constant increase on their
selling value, the Governor in Council may allow the securites
to be reduced provided the sellingvalue of such securities
plus the value of the coin (if any) deposited is never allowed
to fall below the amount required by section 4.

6. When in the opinion of the Governor in Council a tem-
porary emergency exists, he may permit the company to issue
notes in excess of the paid up capital of the company, provided
there has been specially deposited and is kept in the custody
of the Colonial Secretary and the Treasurer an amount of legal
tender dollars equal to the whole face value of such excess
issue for the time being actually in circulation, to be held by
the said Colonial Secretary and Treasurer exclusively for the
redemption of such notes.

7. The powers granted by this Ordinance to the company
to make, issue, re-issue, and circulate notes shall be limited
for a period of ten years from the commencement of this Ordi-
nance; after such period the company shall cease to issue or
re-issue notes but shall redeem any notes which it has pre-
viously issued or re-issued: Provided, however, that if the
company shall fail to comply with the demand of the Treasurer
referred to in section 5 (2), or shall fall to comply with any of
the other provisions of this Ordinance, the power of the con)~
pany to make, issue, re-issue and circulate notes shall im-
mediately cease.

7A. Notwithstanding anything contained in section 7
relating to the termination by effluxion of time of the powers
granted to the company by that Ordinance, but subject in all
other respects whatsoever to the provisions of this Ordinance,
it shall be lawfal for the company to make, issue, re-issue
circulate notes until and including the 13th day of August,
1929, after which date the company shall cease to issue or
re-issue notes but shall redeem any notes which it shall have
previously issued or re-issued.

* As amended bY No. 26 of 1921 and Law Rev. Ord. 1924.

8. Nothing contained in this Ordinance shall exempt the
company from the operation of any law restricting or regulat-
ing the issue of notes in the Colony.

9. Nothing in this, Ordinance shall affect or be deemed to
affect the rights of His Majesty the King His Heirs and
Successons or the rights of any body politic or corporate or of
any other person except such as are mentioned in this Ordi-
nance, and those claiming by, from or them.
[Originally No. 65 of 1911. No. 4 of 1913. No. 26 of 1921. Law Rev. Ord., 1924.] Short title. Interpretation. Power for company to make and issue bills and notes and conditions of such issue. [s. 3 contd.] Deposit of securitites or of coin or of both at option of company as funds exclusively available for redemption of note issue and in the event of insolvency. Monthly publication in Gazette of outstanding notes and securities. Power of Governor in Council to authorise excess note issue in temporary emergency. Issue and re-issue of notes limited to ten years from date of Ordinance. Extension for a further period of the powers granted by section 7. Saving as to laws restricting note issue. Saving of the rights of the Crown and of certain other rights.

[Originally No. 65 of 1911. No. 4 of 1913. No. 26 of 1921. Law Rev. Ord., 1924.] Short title. Interpretation. Power for company to make and issue bills and notes and conditions of such issue. [s. 3 contd.] Deposit of securitites or of coin or of both at option of company as funds exclusively available for redemption of note issue and in the event of insolvency. Monthly publication in Gazette of outstanding notes and securities. Power of Governor in Council to authorise excess note issue in temporary emergency. Issue and re-issue of notes limited to ten years from date of Ordinance. Extension for a further period of the powers granted by section 7. Saving as to laws restricting note issue. Saving of the rights of the Crown and of certain other rights.

https://oelawhk.lib.hku.hk/items/show/1261

1923

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No. 65 of 1911

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