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and that it is unlikely that a loan could be raised at less than 34 (term unspecified), that there would probably be little public subscription apart from subscriptions by banks and the maximum amount which could be raised would be of the order or $25,000,000. He therefore asks that the loan should be raised in London.
It now seems that the issues which have to be decided can be summed up as follows:
1. The amount of the loalis In our telegram 110.600 to liong Kong we contemplated that the 1946/7 special expenditure amounting to $77,000,000 should be financed by loan, It is possible that in 1947-48 further special expenditure will be necesser, which will also have to be met by lean. „e suggest that the Ordinance should authorise a general reconstructioų sud rehabilitation loan of the order of $100,000,0007
2. we imagine that the Treasury will require that, if it is possible to raise $25,000,000 locally, th@ amount should be raised oven at a rate of 34,-. In another connection the Treasury have indicated that they consider 37% is not too high a rate for local colonial borrowing. You doubtless realise as well as we that the principal subscribers are likely to be banks in ilong Kang which would otherwise invest in sterling securities but feel that in spite of this, local borrowing is preferable even at a substantially higher rate. From the Colonial Office point of view, having regard to the need for anti-idlation measured we are prepared to urge upon the Governor the raising . of $25,000,000 at
13.