(opies to 1/€ (10). Tusy, (11)
54126/4/48
Code
OUTWARD TELEGRAM
TO HONG KONG (Sir A. Grantham)
FROM S. OF S., COLONIES.
Sent 10th March, 1948.
16.45 hrs.
Anós. (5).
IMMEDIATE
617
No, 334 Confidential.
1948.
Your despatch No. 1 Confidential of 6th January,
Rehabilitation Loan Ordinance.
1. I understand first issue of $50,000,000 has now been made. Since issue of loan was approved the balance of payments and exchange position of sterling area has deteriorated especially in recent months and possibility of exchange control leakage is an increasingly serious concern. It is accordingly most desirable that all bonds issued in Colonial territories should be registered and not (repeat not) in bearer form. Ordinance however includes provision, under Clause 7 (7) for transfer by delivery, thus covering both ordinary and presumably any premium bonds it issued subsequently under a subsequent Ordinance. Bonds would therefore be in bearer form and provide possibility of Exchange Control leakage.
2.
Amendment a to loan Ordinance to enable the bonds issued in Hong Kong to be made registerable would be as follows:-
Section 7 (4) Omit all words after "the day named in that behalf on the bond".
Section 7 (7)
Section 8 (d)
Omit entirely.
Add words "and the conditions under
which the bonds shall be transferable".
Section 8 (f) Redraft to read "to provide for the
on the bonds shall be paid".
manner in which interest
Section 9
*
Cmit words "together in either case with all outstanding coupons attached to such bond" Provision for the registration of the bonds should then bo included in regulations issued in accordance with Section 8 (d) as amendsć.
3. As issue of $50,000,000 has already been made, grateful to learn what arrangements could be made for ensuring that stock should now be registered or deposited. Appreciate that such actior might seem to be contrary to terms on which loạn was subscribed and might militate against future subscriptions but matter is of great importance. Grateful for your early comment....