4.3
At first sight it would appear that co-operation between the Treasury Chest Officer and the Colonial Treasurer must undoubt- edly result in economies benefitting both parties inasmuch as the middleman's profit is eliminated.
Certain factors operate, however, to make such joint
action somewhat difficult.
The principal stumbling block lies
in the fact that whereas the Treasury Chest Officer requires local currency in regular amounts at regular intervals, the Colon- ial Treasurer finds it advantageous to purchase sterling in such quantities and at such times as seem to him propitious he is practically never compelled to purchase sterling on any specific day or in any specific week.
Another difficulty is caused by a peculiarity of the local exchange market which regularly quotes an opening selling rate for sterling at which business is rarely, if ever, transacted. But the market does not quote an opening buying rate for sterling and the figure furnished by the Hong Kong and Shanghai Banking Corporation to the Treasury Chest Officer for calculations is considerably better than could be published as an opening rate. In other words it is more in the nature of a quotation, and if tenders were called a better rate would probably be obtained but only lower by 1/32 to 3/32 depending on the market, whereas the difference between the opening selling rate and what I can obtain is much more, in some cases as much as or 12/32.
Any attempt, therefore, to transfer money at a mean between the opening selling rate and the buying rate quoted to Treasury Chest Officer would be grossly unfair to the Colonial Treasurer.
Most transfers of money in the local market are the subject of bargaining rates are offered verbally and may remain open only for a few minutes and only when a rate is taken is there any written record. From this it is apparent that difficulty would be found in obtaining the necessary data on which to base