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Special Article

 

Hong Kong Currency

(Local History Unit, Hong Kong Museum of History, 1993)

 

The economic history of a region is often reflected by the development of its currency system. Hence the Museum of History has always paid much attention to building up its collection of local history. Mr. Robert P.F. Lam, our former Curator, in particular had devoted much of his time in building up the collection which by now has attained a reputation for its completeness and fine quality. Mr. Lam's definitive work Currency of Hong Kong has also become a handy reference for research work on the subject.

 

When Hong Kong was established as a free trading port in 1841, there was no local currency available for daily circulation. Foreign currencies such as Indian rupees, Spanish and Mexican 8 Reales, Chinese cash coins and British currency were used instead. Coins specially issued for Hong Kong did not appear until 1863 when the first regal coins of Hong Kong, i.e. coins bearing the portrait or Royal Cypher of the reigning monarch, were issued. They were produced by the Royal Mint, London and comprised the silver ten cent, the bronze one cent and one mil, the last being one-tenth of a cent.

 

Foreign currencies continued to circulate alongside local coinage, but most of these were not acceptable for government payments. Owing to the financial loss, the Hong Kong Mint established in 1866 was closed two years later. As a substitute for the regal dollar coins, silver trade dollars from the USA, Japan and Britain were use used. From 1895, legislation was enacted in attempts to unify the currency. With the issue of one dollar note pursuant to the One-Dollar Currency Note Ordinance of 1935, the Government declared the Hong Kong Dollar as the local monetary unit. It was not until 1937 that the currency of Hong Kong was finally unified. The history of local coinage is therefore only one hundred and thirty years old. A total of six coins of different shapes and metal contents with denominations of ten, twenty and fifty cents, one, two and five dollars, have been made available for general circulation in Hong Kong.

 

It is unlikely that paper money was in local circulation as a medium of exchange for daily use prior to the establishment of the Oriental Bank which was the first bank to open in Hong Kong, coming into operation in 1845. Other banks began to establish and issued their own banknotes. However, such notes were not accepted by the Treasury for payment of government dues and taxes but were still acceptable for circulation in commercial field. Under the Currency Ordinance 1935, banknotes in denominations of $5 and above issued by the three authorized local banks, namely the Mercantile Bank of India Limited, the Chartered Bank of India, Australia and China (Standard Chartered Bank), and the Hong Kong and Shanghai Banking Corporation, were all declared legal tender. During the Japanese Occupation, Japanese Military Notes were the only means of daily exchange locally. The issue of local currency was however resumed by the Hong Kong Government and the authorized local banks after the liberation. Nowadays, banknotes of legal tender in local circulation comprise six denominations of $10, $20, $50, $100, $500 and $1,000. The issue of $5 note was discontinued after 1975 when the government replaced it with the $5 regal coin.

 

Since the Oriental Bank was the earliest bank to operate locally, its notes have become very rare item. A local newspaper reported that the Museum had purchased one 1866 Oriental Bank $5 banknote at an extremely high price, and its eventually aroused tremendous interest from the public. The Museum received incessant public enquiries, either in writing or by phone, on the value of the banknotes they posses, most of which are the type of 1853 Chartered Bank $5 banknotes. As no date of issue is indicated on that type of banknotes, the phrase "Incorporated by Royal Charter 1853" shown on the banknotes has led to the misunderstanding that the banknotes were issued in 1853. The Chartered Bank of India, Australia and China, which is the forerunner of the present-day Standard Chartered Bank was incorporated in London on 29th December 1853. Its Hong Kong Branch was set up in 1859 and issued its own notes on 1862. Therefore its banknotes could not be issued earlier than 1862. As the note-issuing rights were defined in the Bank's original charter of 1853, the phrase "Incorporated by Royal Charter 1853" was printed on the bank-notes, and thus 1853 does not stand for its date of issue.

 

The Museum has all along persisted in acquiring items of great rarity and historical significance for collection so as to preserve the traces of historical and cultural heritage. We are now in possession of quite a complete set of Hong Kong currency, which is mainly attributed to the expert guidance and assistance from the Museum's Honorary Advisers. To fill the gap in our collection, the public's donations or offers of selling their private collection to the Museum are always welcome. A panel of advisers on numismatic collection has been established to ensure the authenticity and reasonable prices of the items being purchased, but not to provide any rating service to the public. Instead, people may contact coin dealers or related societies to find out the value and genuineness of the banknotes or coins they own.