20
meet any emergency.
The Governor said that he was
Hora Kuns
advised that a local dollar issue in Shanghai could
be made at an effective interest rate of 4.34 per cent.
which he and we ourselves regard as disappointingly
high. Alternatively, he asked for advice as to the
possibility of borrowing in London, at a lower rate,
either by a sterling issue or from the Crown Agents
for the Colonies.
Mr. Caine tells me that there is no doubt
that the money can be raised in Hong Kong, and he
T
and
thinks that if we pressed Hong Kong Shanghai Bank were messall, they
, might arrange a rather cheaper rate.
The Treasury now report their views about the
possibility of a loan issue in London, and they decide
that the U.K. capital market should not for this
purpose be made available to Hong Kong, but that the
local Government should meet their needs for a local
loan in Hong Kong.
We must accept this advice, and should now
telegraph to the Governor and send a copy to the
Crown Agents and Treasury as in d.h.
841
9.1.40.
Gant-
Copy has
Already gone has Gov (vide (3)
Cont? 12/1
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ance to
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Campbell, after riscussia with
hem.
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solution, Khagh
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01/5) meject
5. Caine, 40
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