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account, $77,000 in the estimates for 1908, $115,500 in
those for 1909, $154,000 in those for 1910 and $192,500 in
those for 1911, this last figure representing the full in-
terest of 31% on £550,000 which will be approximately the
total expenditure on the British section of the Kowloon-
Canton Railway including the reclamation for the terminus
at Kowloon.
2.
With this arrangement the keeping of the
special account will be simplified its position at any date
can be predicated and by the time the 5th. instalment has
been paid in and out of the fund it will consist of the sum
of the differences in the interest paid each year at 44% by
the Viceroy on the unrepaid instalments and at 34% by the
Colonial Government on the repaid instalments and the total
interest paid to stockholders in the five years plus the
expenses of the loan to them. This difference will consti-
tute a small sinking fund in anticipation of that to be
started at the expiration of five years from the date on
which the interest on the inscribed stock shall begin to
accrue.
3.
The Crown Agents in a letter addressed to
the Colonial Secretary on the 28th. February last stated
that if it should be possible it would be very desirable
that the contributions to the sinking fund should be com-
menced at once. I am satisfied, having regard to the pre-
sent