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38127

219

No. 152.

CROWN AGENTS to COLONIAL OFFICE.

(Received October 27, 1905.)

Whitehall Gardens, London, S.W.,

October 26,

1905.

38126

SIR,

No. 151.

I am, &c.,

H. BERTRAM COX.

CROWN AGENTS to COLONIAL OFFICE.

(Received October 27, 1905.) '

[Answered by No. 160.]

Whitehall Gardens, London, S.W., October 26, 1905.

Hong Kong.

I HAVE the honour to acknowledge the receipt of your letter of the 23rd instant, No. 36884/1905, enclosing a copy of a telegramt from the Governor of Hong Kong and informing us that an Ordinance has already been passed for raising the sum of £2,000,000 under the provisions of Ordinance 1 of 1893.

2. In reply I beg to say that, unless there are very strong reasons to the con- trary, it appears to us that it would be desirable to proceed in the manner which I have already suggested privately and pass fresh legislation on the subject. The Hong Kong Ordinance No. 1 of 1893 was passed at a time when debentures were out of favour with the London Stock Exchange. It does not, therefore, provide any machinery for raising money by means of debentures. At the present time, however, debentures are more favoured than stock, and we are, therefore, recommending the adoption by the Colonies, as opportunities offer, of amended legislation providing for the raising of loans either in the shape of stock or debentures, as may prove most advantageous at the time of the issue of a loan. This amended form of legislation has recently been adopted by Lagos, and I enclose a copy of the Ordinance that has been passed and also of the Loan Ordinance providing

Lagos Ordinance 22, of 1904. Lagos Ordinance 23, of 1904.

for the raising of the particular sum of money required, and I beg to suggest that these Ordinances should be sent to the Governor of Hong Kong and that he should be directed to pass similar legislation. The only amendment that we consider desir- able is that the General Loan and Inscribed Stock Ordinance should confer specific power upon us to decide as to whether a loan should be issued in the form of stock or debentures, which your letter of the 21st of February, No. 5012/1905, § informs us. that the Lagos Ordinance does not confer on us.

3. If, however, the Secretary of State should still consider, notwithstanding what I have said, that it is inadvisable to repeal the existing Ordinances, I would suggest that the drafting of an amending Ordinance to meet the points mentioned in our letter of the 16th instant* should be undertaken in the Colony or in the Colonial Office. The drafting of Ordinances, for which we have no precedent; is a work to which we find it difficult to give the necessary amount of time and attention and we do not possess the necessary legal knowledge.

I have, &c.,

E. E. BLAKE.

SIB,

Hong Kong.

IN continuation of our letter of the 9th instant, I have the honour to enclose, for the information of the Secretary of State, a copy of the account which, together with the vouchers, we are forwarding by this mail to the Governor of Hong Kong, showing the result of the transactions which have taken place in connection with the advance which we have made to the Government of Hong Kong in order to enable the Colonial Government to make a loan to the Viceroy of Wuchang.

2. The cost of the transmission to New York of the equivalent in dollars of £700,000 for payment to the Chinese Minister there has been £783 7s. 6d., the rate obtained averaged 4.85% and the dollars paid over amounted to $3,399,156.25.

3. As we informed you in our letter of the 9th instant,* the charge of our agents

for transmitting the money was of 1 per cent., viz., £437 10s., while the interest on the advances which we made at bank rate, in order to enable the various remittances to be made prior to the 6th October, amounted to £582 3s. 6d. Against this, how- ever, our agents have allowed interest at 1 per cent. for the period the money was in their banker's hands in New York prior to its being paid over, and this amounted to £236 68., so that, deducting this sum from the other two, the cost of the transaction works out, as I have said, at £783 7s. 6d. The rate of interest allowed may appear to be small, but our agents inform us that bankers in New York refuse to allow any interest on current accounts and, therefore, the amount allowed has, in fact, come out of their own commission, which has consequently been reduced by more than one- half.

4. In addition to the advance of £1,100,000 we have, therefore, had to provide the Colony with the sum of £783 7s. 6d. so that the indebtedness of the Colonial Government to us is £1,100,783 7s. 6d.

5. The result of the transaction has been somewhat of a disappointment to us. but we believe that, in the circumstances, it has been carried out on the most econo- mical terms possible. We are advised that at this time of year it is not easy to remit so large an amount without sending gold. which would, of course, have given great dissatisfaction to the money market here, and it was necessary for the same market reasons to remit the amount in instalments and not all on one day.

6. Moreover, the arrangements which had already been agreed to had tied our hands. There is no doubt that a better arrangement would have been that the money was to be paid here or that the Chinese Minister in New York should have been instructed to draw a bill upon us for the required amount. Either of these courses would have

had the effect of transferring the cost of the exchange on to the Chinese authorities instead of its having to be borne as at present by the Hong Kong Government.

7. Another mode of making the payment would have been for us to have arranged with Messrs. J. S. Morgan and Company here for the remittance to be made direct through them to their New York House, but the secrecy of the business precluded us from approaching them in the matter. We, however, made enquiries as to what would be the result of this course, and we are satisfied that the rate asked for the transaction would have been considerably less favourable than that obtained by us, it being even suggested that the rate required would probably have been $4.80 to the pound. If the payment on such a basis had been arranged, the cost of the remittance, as represented by the rates of 4.80 and 4.85 ths, would have amounted to about £8,000.

8. We think, therefore, that taking into consideration the restrictions which existed as to the mode of transferring the money to New York as good a bargain has been made over the matter as was possible.

• No. 147.

No, CXII. in No. 169,

* No. 150.

§ 5012: not printed.

1283

• No. 145.

3 KJ

1

PUBLIC RECORD OFFICE

Reference :-

TPIC.O. 882

PUBLIC RECORD OFFICE, LONDON

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