MERCANTILE BANK NOTE ISSUE ORDINANCE, 1911

MERCANTILE BANK NOTE ISSUE ORDINANCE, 1911

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, th e Mercantile Bank
Note Issue Ordinance, 1911.

2. In this Or dinance,

(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, reissue 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 specified 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.
If the company issues notes in excess of the amount
authorized 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 exceeaing
ten thousand dollars continues, and to a further fine not exceed-
ing fifty dollars a day for every day during which such excess
continues for every complete additional sum of ten thousand
dollars in notes so issued in excess.
(4) Such part of the books of the company as may contain
any entry relating to the notes issued or to be issued by the
company or relating to the amount of such notes in circulation

As amended by Law Rev. Ord., 1939.





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 rnay tend to ensure 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 authorized in that behalf in
writing signed by the Treasurer.
Every such authorized person shall 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,
on demand made by any such authorized person showing, if
demanded his authority in that behalf, refuses to produce any
such book, account, minute or memorandum to him for his
inspection and examination 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 exceeding five hundred
dollars:

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

Such notes shall not he legal tender but shall be redeem-
able 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 an 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 which is unlimited legal
tender in the Colony to an amount equal to the face value of the
notes In circulation , or at its like option the company shall
deposit and at all times keep deposited 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 such coin shall be under the control
of the Treasurer and shall be held by the Crown Agents and
the Treasurer respectively as special funds exclusively available
for the redemption of such issue of notes, and in the event of
the company being wound up such securities shall be so,ld and
the proceeds of sale, together with any such coin as 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 difference 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.

If for two consecutive months the said market price plus
the value of the coin (if any) deposited with the Treasurer
indicates 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 reissued until the amount so required is
reached, or at his option lie shall demand the deposit of
additional 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: and
the company shall comply with such demand. If however for
three consecutive months the said market price indicates a con-
tinued and constant increase on their selling value, the Governor
in Council may allow the securities to be reduced, provided the
selling value of such securities plus the value of the coin (if
any) deposited is never allowed to fail below the amount required
by section 4.





6. When in the opinion of the Governor in Council a
temporary 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, reissue and circulate potes shall be limited for
a period of ten years from the commencement of this Ordinance;
after such period the company shall cease to issue or reissue
notes but shall redeem any notes which it has previously issued
or, reissued: Provided however that if the company fails to
comply with the demand of the Treasurer referred to in section
5 (2), or fails to compIv with any of the other provisions of this
Ordinancei the power of the company to make, issue, reissue and
circulate notes shall immediately cease.

7A. Notwithstanding anything contained in section 7 relating
to the termination by effluxion of time of the powers granted to
the company by this Ordinance, but subject in all other respects
whatsoever to the provisions of this Ordinance, it shall be lawful
for the company to make, issue, reissue and circulate notes until
and including the 12th day of July, 1939, after which date the
company shall cease to issu6 or reissue notes but shall redeem
any notes Which it his previously issued or reissued.

8. Nothing contained in this Ordinance shall exempt the
company from the operation of any law restricting or regulating
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
Successors or the rights of any body politic or corporate or of
any other person except such as are mentioned in this Ordinance
and those claiming by, from or under them.

As amended by No 11 of 1929 [26.1.29].
* As amended by Law Rev. Ord., 1939.
[Originally No. 65 of 1911. No. 11 of 1929. Law Rev. Ord., 1939.] Short title. Interpretation. [cf. No. 54 of 1935, s. 2.] Power for company to make and issue bills and notes and conditions of such issue. Deposit of securities 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. [cf. No. 54 of 1935, s. 4.] Monthly publication in Gazette of outstanding notes and securities. Power of Governor in Council to authorize excess note issue in temporary emergency. Issue and reissue 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. 11 of 1929. Law Rev. Ord., 1939.] Short title. Interpretation. [cf. No. 54 of 1935, s. 2.] Power for company to make and issue bills and notes and conditions of such issue. Deposit of securities 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. [cf. No. 54 of 1935, s. 4.] Monthly publication in Gazette of outstanding notes and securities. Power of Governor in Council to authorize excess note issue in temporary emergency. Issue and reissue 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/1518

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