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the state and feeling of the Market for Chinese securities is an important consideration and if in the first instance £1,000,000 of the Loan were placed the Corporation's obligations would be reduced and the construction of the Railway, so far as ways and means are concerned, practically assured.
To prolong the period and increase the number of emissions not only involves the Corporation in extra expense but also increases the risks of the Market. On the other hand the Corporation might benefit by this course although in our opinion the prospect of such benefit does not offset the risk of loss.
Notwithstanding these objections we are willing, in order to meet the Governor's wishes, to take the risk of trouble with the Chinese and the risk of the Market and we will agree to issues of not exceeding £500,000 provided that the first two emissions shall at our option be not less than £500,000 each and that the Government of Hongkong will not require the amount which is to be specially set aside (as per Article 10 Working Agreement) for rolling stock and Working Capital to come out of the first £1,000,000 of Bonds.
As the period to which these details would relate is only of a brief and passing character compared with the duration of the Agreement and as circumstances might arise which would make it the wish of all parties to vary them, we venture to suggest that instead of stereotyping them into the Agreement, we should, on the conclusion of the negotiations with the Chinese, give a separate undertaking to exercise our rights under Article 1 only to the extent agreed upon in the negotiations and approved by the Governor of Hongkong.
We are &c.,
The British and Chinese Corporation, Limited.
(Signed)
W. Keswick.
Chairman,