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the negative, and paragraph 2 of the savingram implies that conditions (b)(1) and (11) are satisfied in practice (apart from a negligible amount of $150,000) although there have been no such conditions laid down when the bonds were issued.
3. Fortamore also raised three more points, which have not been put to Hong Kong (his letter was subsequent to our telegram No. 1245):-
t
(1) Why is it so difficult to market registered issues
in Hong Kong? The answer appears to be that the Chinese will not subscribe to a loan which is in
form which imposes any restriction on its ready ...sale.
(11)
What would be the attitude of Hong Kong towarda an application for official U,S. ♬ in respect of interest or redemption money due to a resident in the U.S.A? Admittedly we have no information on this point, but it seems from the experience of the first issue of $50 million that any purchase by, or transfer to, a non-resident, except of course to Chinese with dual residence, is very unlikely.
(iii) Whether registered bonds where the interest is
paid by means of coupons to bearer might be acceptable? we understand that, even if the original purchases of the bond were registered, the Chinese have, partly to escape taxation and partly because of the lack of secure postal services between the Chinese hinterland and Hong Kong, evolved a system of transfers where the space for the transferee's name on the trans-
for document is left blank, and the bonds may thus pass tiuough many hands before any alteration is recorded in the register as to the owner.
/4. It