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185
:
on political lines. If the former, the course of action
which we and our brokers have taken has been right and in
the interests of the Colony. If however political consider-
ations are to be the governing factor then we should be in-
structed accordingly. In such case however it must be dis-
tinctly recognized that the Colony will have to pay for
disregarding business principles and that it will be the
English Banks and not the Colonial Government which will pro-
fit by such transactions.
4. At present our Bills are sold to the highest
bidder or, more frequently, distributed among all the Banks,
English or Foreign, at the rate quoted by the highest bidder
and under this system the Colonial Goverment ohtuins the
fullest benefit of competition. If however the Bills vere
offered only to the English Banks they would agree among
themselves a rate which would be mutually satisfactory to
them and the Colony would have to bear the consequences of
dealing with a ring. The Foreign Banks also would still be
under the necessity of making remittance to China and would
either have to import silver or go to the English Banks to
assist them in the matter, but in such case the profits on
the transactions wo le go into the pockets of the English
Banks instead of into that of the Colonial Government.
5. Such being the farts of the case we fail to soe
that the sale of our Bills to the English Banks only could
be justified. on business grounds, but if the Secretary of
State should decide that political considerations should be
given the preference there will be no difficulty in corrying
arrangement into effect.
the
6. As to the special claims of the Hong Kong and
Shanghai Bank to corsideration we think that Sir M. Mattan
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is