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remaining $1,500,000 can be raised here at the most favour- able time in the near future, but the work of redemption
need not await this operation as there will be ample funds
from the Bank's subscription and from surplus balances of
the Colony to keep the work going for some time to come.
4.
I would, therefore, suggest that, if
you approve of the scheme, instructions should be issued forthwith to the Crown Agents to purchase Hongkong Inscribed Stock at or below 70 and to draw on the Colony for that
purpose: it being anticipated that the rate of exchange will
be at or above 3/- the dollar.
5.
I should also be glad to receive your
approval by telegraph so that the necessary legislation,
which is now being prepared, may be effected as early as possible, it being proposed to enact a law similar to Ord- inance No. 12 of 1916, regard being had to the variations
of conditions.
6.
The advantages of the proposed scheme
may be summarised as follows:-
-
(1). The annual charge in the Estimates will
be less than that hitherto borne;
(2). the annual amount to be provided will in
future be a fixed sum not subject to variation on
account of exchange;
(3). the Loan will be extinguished in 1942
whereas, under present circumstances, it would entail
an annual charge for some years longer;
(4). the advantage in (1) will increase as the
rete of exchange falls and it may reasonably be anti-
cipated that the price of silver will, in a few years
sfter the war, approximate more to the prices in force
before the war; and
(5). as an indirect advantage the money spent
on purchase of the stock in London mey be considered
a8