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In a loan agreement who is the lender is proved by seeing who provides the money.
This sum of £1,100,000 is really borrowed from the Government of Hongkong so what more need be said?
Hitherto loans through foreign banks have always carried a discount which causes enormous loss.
Moreover after settling the loan the foreign Minister at Peking had to be notified through the Wai Tu Pu and our Minister abroad written to: then the foreign Minister had to telegraph it to the foreign bank before the bonds could be made, some thousands or tens of thousands, each of which our minister had to seal before they could be issued to the market.
This multitude of details delayed actual payment at least 4 or 5 months.
In present case ready money was essential for the redemption of the line to the great amount of Tls 7 or 8 million. The Development company's assent was got only 7 or 8 days before the date limit for payment: so the usual loan arrangements were quite impracticable.
The foreign banks could not possibly undertake the business.
It happened that the Hankow Consul-General Fraser had told memorialist that Hongkong had money in reserve and offered to arrange matters, the interest to be less than a bank would want. As he also said there would be no discount agreement was made with him.
The separate despatch given was to provide for the chance that our own provision of funds might not suffice or further loans be required. Having in the first instance made the redemption loan England would then certainly compete for these and so it was proper to lay down