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Durres 1-2 Cavere 3.
to advance a considerable sum on this Government's guarantee of repayment. I informed Mr. Barlow, the Chief Manager of the Hongkong & Shanghai Banking Corporation, that I considered myself bound to accept this offer, which was so much more advantageous than his, and he thereupon agreed to waive his condition as to the deposit of silver dollars in the Colony. The statutory obligation to keep coin or bullion against excess note issue prevented him from accepting the deposit of securities but he was prepared to issue a limited amount of notes against gold coin in the custody of the Crown Agents. I may mention that the Chartered Bank of India, Australia and China is legally in a position to issue notes against the deposit of securities, but the Manager had already informed me that he might require for his own purposes the entire issue which the Bank is allowed to make.
6.
The Bank's terms are set out in the
enclosed letter and Memorandum, and I attach a
copy of the letter which has been sent in reply.
If an agreement is reached, the position will be
that this Government will pay 51% on gold coin deposited in London, and 1% for services rendered
by the Bank, making a total of 6%. The money will
be advanced to borrowers at 8%. The Bank on its part
will receive the 1% and it will also be relieved
of the 1% note issue tax on the total sum
advanced, a large part of which will probably not be paid in notes. The Bank will also handle additional
business.
The money offered by the other banks
would carry interest at from 6 to 7%, the latter
being the normal rate charged on overdrafts. The