Hamilton to Rogers (Permanent Under-Secretary)

In reply to Mr Elliot's letter of the 24th, I am
directed by the Lords Commissoners of Her Majesty's Treasury to
acquaint you, for the information of the Duke of Newcastle, that
My Lords are of opinion that, to meet the pressing emergency
described in the Despatch from the Governor of British Columbia,
it will be expedient to authorise him to adopt the provisional
measure which he recommends of fabricating Pieces of the intrinsic
value, in Gold, of the United States 10 and 20 Dollar Pieces, to
pass current as money, and to be received in payment of Government Dues.

Experience has shown that the recognition of Coins or Tokens
by accepting them in Government Contracts is, generally, sufficient
to give currency to them without declaring them to be Legal Tender,
and My Lords think that it would be desirable, if possible, to
avoid that step in the case of a provisional Token issued without
the controlling authority of the Master of Her Majesty's Mint. They
would not, however, object to a discretionary authority being given
to the Governor to declare the proposed pieces to be Legal Tender
for a limited period—say one year—with power to extend the same
by Proclamation for further limited periods, in case it should be
found that the Tokens do not obtain currency without such sanction.

My Lords suggest that the proposed pieces should bear a
distinctive Assay Mark denoting their gross weight and intrinsic
value in current money and They consider that the Governor is quite
correct in his opinion that such value should be determined by the
quantity of Fine Gold contained in each Piece without regard to the
Silver found in the Native Gold.

It is true that the admixture of Silver would give to the Coins
additional value in the General Bullion Market, but it is the invariable
practice to regard Silver contained in Gold coins as alloy, not affecting
their value in current exchange. Such is the case with the British
Sovereign commonly called the "Dragon" (from the device of St
George and the Dragon on the reverse) which contains a considerable
portion of silver introduced intentionally as Alloy, and with
the Gold Coins of Australia, the native gold of which contains a
considerable portion of Silver.

It will, probably, be desirable to protect the circulation of the
proposed Pieces by enacting Penalties for the fabrication of the
Assay Mark—and for attempting to pass them after they have been
chipped or otherwise wilfully deteriorated. Whatever may be the
device adopted, the Pieces should not bear the effigy of Her Majesty
the Queen—which is proper to Coins issued from Her Majesty's Mint.

My Lords have confined Their approval to the measure recommended
by the Governor of British Columbia, but it may be a question whether
Pieces of lower value than 10 Gold Dollars may not be desirable, and
They would not object to his being allowed a discretion to issue
them of the value of 5 Dollars, which would be equivalent to £1.0.6
in British money.