54126/4/48
Extract from letter to Sir Sydney Caine
from Mr. Follows (Hong Kong) dated
12th February, 1948.
2
9/2 Boss
173
A
Make
79
9.
In regard to Cockburn's remarks about the Chartered Bank playing their part in the floating of the new Loan, while we naturally hope that they will take up a substantial allocation of the issue, I think you will agree that we can never count on them to give us support on the scale we can expect from the Hong Kong Bank. Indeed, we must face the fact that it would not be practical politics to float a loan locally unless we had the Hong Kong Bank behind it. In actual fact, the Chartered Bank took up $5,000,000 in the recent issue and subscriptions from their constituents only amounted to $2,723,000. I do not think that the funds they have available locally permitted them to participate on their own account on a larger scale. The Hong Kong Bank guaranteed to take a minimum of $25,000,000, if required, and were prepared, if necessary, to go up to about $30,000,000.
10.
We are sending an official communication regarding the response to the first issue of $50,000,000. Actually, it was disappointing. Very little was forth- coming from the private investor, and although we had many enquiries from Singapore, the fact that we had income tax here apparently deterred most of their investors, and in the end we only received about one and a half lakhs from that area. The response from the Chinese was poor as we expected, and even the large European firms and Trusts of various sorts, on whom we had relied for our main support, did not subscribe on the scale expected. The response would have been better if the loan had been floated some months earlier, and it is unfortunate that it took so long to clear matters with the Treasury.
11.
I considered it undesirable to keep the lists open too long as it was important, from the point of view
of