COPY.
43331/16.
PARAPHRASE
TELEGRAM.
45247.
from
293
The Secretary of State for the Colonies to
the Governor of Hong Kong.
(Sent 4.50 p.m. 12th September, 1916.)
With regard to local loan mentioned in your telegram of 5th September please refer to my telegram of 31st August. Have you considered
whether it would not be better to issue larger local loan for say 10 million dollars or for an indefinite amount, three million of which would be offered to His Majesty's Government as a gift the balance being invested by Colonial Goverment in Imperial loans? When first instalment of Federated Malay States loan, which was on 6 per cent basis, was offered whole amount was over subscribed. It is now proposed by Straits Settlements Government to issue locally 5 per cent Bonds in denominations of 100, 500, and 5,000 dollars identical Exchequer Bonds repayable 5th October 1921 and proceeds being invested in Imperial Exchequer Bonds. I would
without suggest that you should consider whether, imperilling success, rate of interest could be less than 6 per cent. It is important not to attract subscriptions from this side. In this respect present high rate of exchange will help. suggest that loan should be repayable in from five to twelve years at option of Government.
BONAR LAW.
would