Enclosure No. 3.
31
HONG KONG & SHANGHAI BANKING CORPORATION.
The Honourable
The Colonial Treasurer,
Hong Kong.
Sir,
Hong Kong, 8th February, 1928.
HONG KONG AND SHANGHAI BANKING CORPORATION
NOTE ISSUE.
I must apologise for again troubling you over
the question of security for any temporary increase in this Bank's Note Issue but, although I stated in my letter of 17th October 1927 that the suggestions made by H.M.Treasury
would entirely meet the Bank's requirements, I now find on
further consideration that a deposit of Gold in San Francisco
would be a cumbersome procedure involving risks of exchange
in transferring the money to and from London and San
Francisco in addition to other expenses. Our London Manager,
Sir Newton J. Stabb, has suggested that the most convenient
arrangement would be that sovereigns should be earmarked by
the Bank of England on behalf of the Crown Agents and he has
had an interview on the subject with an official of H.M.
Treasury.
I will, therefore, be grateful if you will re-
open the question with the Colonial Office; Sir Newton Stabb
has asked me to state that if any further information is
required he will be very pleased to furnish same.
I