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accelerated after five years and the interest on the money lent is proportionately reduced after the repayment of each instalment. It follows therefore that any other system of raising the money which does not correspond with these conditions must necessarily impose absolutely unknown risks upon the Colonial Government inasmuch as the result will depend upon contingencies over which the Colony will have no control i.e. the rate of interest at which it might be possible to employ the monies coming periodically into the hands of the Colonial Government and further whether the repayments of the Viceroy are spread over the whole ten years provided for in the agreement or are completed after five years in accordance with the option given to him.
7. On the other hand by raising the money by the issue of Stock the debt of the Colony will be inflated for a longer period than is absolutely necessary while the obligation of the Colony in respect of interest and sinking fund will necessarily be prolonged after the repayments by the Chinese Viceroy will have come to an end.
8. The arguments in favour of an issue of Stock appear to be as follows. Such an issue would be more popular with the Stock Exchange and Financial Houses than an issue of Debentures corresponding in conditions of repayment with the terms of repayment arranged with the Chinese Viceroy inasmuch as an issue of Stock would be made on the lines of the existing 3¼% Stock and would therefore be issued at a discount whereas Debentures would be issued at whatever rate of interest would most nearly command the price of par and it would therefore be only large holders of the Debentures who would be able to average
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