XCONFIDENTIAL.
Sir.
THEO
6616
VERDMENT | HOUSE.
291
HONGKONG. 12th. December, 1916,
90% 59356
Referring to my Despatch No. 398 of the 2nd. November, I have the honour to report that the public applications for the Hongkong War Loan were in the sum of $2,060, 800 only, the Hongkong and Shanghai Bank taking up the balance of 8939,200. The Manager had promised to take up any unsubscribed balance of the loan but he did not anticipate that this undertaking would involve so large an investment in a security his Institution did not really want. The action of the Bank shows therefore a very commendable
public spirit.
2.
There were in all 103 applicants, eleven of whom were Chinese; these latter subscribing £231,100.
3,
The lack of support. afforded to the loan may be ascribed to the high rate of exchange prevailing, whereby a sterling investment at % has become considerably mre attractive than a silver investment at the same rate of interest; it being anticipat- -ed that, when normal times return, the dollar will be quoted in terms of sterling at some 20 per centum or more below its present
rate.
I have the honour to be,
Sir,
Your most obedient,
bumble servant,
Romag
Governor,&c..
THE RIGHT HONOURABLE
WALTER LONG, H.P, &c..
&C..
&o...