concerned including the Hone finance side of the Treasury, the Crown Agents and they would be present. I accordingly submit a revised draft to Mr. James and also a letter to Mr. Goldburg covering the correspondence and inviting him to the meeting
An early meeting is necessary as we
understand that Mr. James is likely to be leaving the Treasury soon and it is important that it should be arranged when he is able to attend.
Hi JB Will ann sa
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15th August, 1946.
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leave
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1
As regards the draft letter to Mr. James
Aside
(a) I would omit the last sentence of paragraph 1 which suggests that the loan might be guaranteed by H.M.G. This would, I believe, involve Imperial legislation. from that, I think that the Treasury must face up to the issue of giving the assurance | which the Crown Agents want or of agreeing to advances from U.K. funds. The latter would, of course, be preferable so far as Hong Kong is concerned, and I should like to press the Treasury to agree to that alternative.
(b) I have amended the wording of the first issue for decision. There is no reason why we should not make the definite suggestion that the loan ordinance should authorise a general reconstruction and rehabilitation loan of the order of $100,000,000.
(c) As regards the second issue, I must say tha t I would prefer to put it that we do not see much advantage in raising $25,000,000 locally, since the principal subscribers are likely to be banks in Hong Kong which would otherwise invest in sterling securities, and particularly if it involves a higher interest rate than that payable on a loan raised in this country. If, however, the Treasury are still anxious that part of the loan should be raised locally, we should be prepared to urge upon the Governor the raising of $25,000,000 at 31%.
(a) As to the third issue, I would put it that if the Treasury cannot give the assurance the Crown Agents want, there seems to be no alternative but to provide the money from U.K. funds.
(e) On the fourth issue, I should be disposed to include those items which have been
decided