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DESPATCH.
HONG KONG, 18 Febr 1907
No 6201
C.O.
6201
Rece'd Pre 18 FEB 07
Note Issue of Hongkong & Shanghai Bank.
Previous Paper.
Corporation urge that note issue be allowed to increase automatically with capital.
Copy com'd to Treas.
Minute 74H, 7688
Subsequent Paper.
£ (78) £23000-11-0Mr. Lucas
I thought they would wish for this. We cannot allow an extension of the ordinary note issue on the present terms (that they deposit securities to the extent of one third with the Crown Agents) which is the survival of an old arrangement such as would never be permitted now. But in order not to handicap the Bank in its competition with foreign rivals I think we might agree to an extension of the ordinary note issue, pari passu with the extension of the paid-up capital, on condition that this extension of the issue is fully covered by securities deposited with the C.A. We shall be making them a handsome present, since of course the Bank will draw interest on the securities. But the extension of the note issue will be fully secured, and that is the main point.
I suggest this to Treas., sending copy of tel.
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(To be sent at once)
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Page 259
J. Wolf's barry for his of as
him that unless he See string thin the arrangement Care suggested, Lord Elgin proposes to leave the matter to Sir M. Nathan's discretion.
CPL Governor. No,
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