TELEGRAM from the Governor of Hong Kong to the
Becretary of State for the Celenies.
273
Dated 29th June
(Received Colonial Office 10.10 a.m. 29th June, 1925.)
A A A A
Priority.
Run on Native Banks last week pommission was
given to them to suspend operations temperarily this permission must now be withdrawn immediately in order
to avert financial crisis. Managers of the Hong
Kong and Shanghai Bank and the Chartered Bank stat ed
that they are prepared to finance Hative banks up to
#,000,000 dollars which they understand will save the
situation subject to the following conditions;
the
two banks will take over securities held by the Native
banks and will advance 1/3rd of the amount advanced
already on these securities subject to guarantee by
the Government that the two banks will suffer no less
whatever including non-payment of interest,
Government to absolve them from responsibility in the
event of any securities not being in order, as matter
is of such urgeney that time does not permit of
thorough serutiny. The Government will also after
two years' pay on demand to the two banks any balance
outstanding. The two banka shall be permitted to
isme notes to the extent of these special advances
covered by approved sterling securities to be specially
deposited with the Crown Agents fer the Colonies. The
this entail the Hong Kong and Shanghai Bank holding 100
than 1/3rd of the total note isme in silver, this
Chartered stipulation to be temporarily suspended.
Bank is not required to hold sover in silver and so is
not affected by this provision. Should heavy demand
for silver in exchange for notes arise Government to
take