A (1) 8
REPORT ON THE TRADE LOAN.
The first loan was made on 16th November, 1925 and by 31st December, 1926 the loans issued on the recommendations of the Trade Loan Committee had reached a total sum of $15,524,588.46.
During the period under review repayment of Principal monies was effected to the extent of $2,604,930, and the outstanding loans on December 31st, 1926 totalled $12,919,658.46. Interest in arrears amounted to $117,369.42.
No call was made on the Colony's funds, the Loans being financed by borrowings from the Straits Settlements Government, the West African Commissioners and Hong Kong & Shanghai Banking Corporation amounting in all to £1,800,000.
During the year £400,000 of this was repaid.
The loan has been issued to applicants with two or three exceptions on the security of mortgages on land or shares. Interest is payable quarterly at the rate of 8% per annum increasing 1% per annum every half year, with the proviso that when the interest is 9% or over, 1% is deducted if such interest is paid within ten days of being due.
The financial dealings of the Trade Loan are kept separate and distinct from the Colonial Government Account. An account is kept with the Hong Kong & Shanghai Banking Corporation in Hong Kong which is a debit account secured by the deposit of gold with that Bank in London.
It was realised that the effects of any sudden drop of the silver exchange would have to be carefully guarded against. The loan to the Hong Kong Government was in sterling and interest on such and repayment would have to be in sterling. On the other hand the loans to persons in Hong Kong are in silver and repayment is also made in silver. Since the loan was initiated and up to the present time the dollar has dropped about 4d. in sterling value. Thus if sterling had been changed into silver this would have meant a very serious loss.
This difficulty was overcome with the assistance of the Hong Kong and Shanghai Banking Corporation. Under the ordinance governing their note issue, they can issue notes in Hong Kong on certain conditions as to cover. The sterling lent by lenders to the Hong Kong Government has been deposited with the Hong Kong and Shanghai Bank and as the other securities held by the Bank against their note issue, have always been sufficient to cover their note issue, this gold deposit has been treated as a deposit upon which the Hong Kong and Shanghai Banking Corporation allows the Hong Kong Government 1¼% per annum. This deposit must always be sufficient to cover the debit working account of the loan in Hong Kong.
A (1) 8
REPORT ON THE TRADE LOAN.
The first loan was made on 16th November, 1925 and by 31st December, 1926 the loans issued on the recommendations of the Trade Loan Committee had reached a total sum of $15,524,588.46.
During the period under review repayment of Principal monies was effected to the extent of $2,604,930. and the outstanding loans on December 31st, 1926 totalled $12,919,658.46 Interest in arrears amounted to $117,369.42.
No call was made on the Colony's funds, the Loans being financed by borrowings from the Straits Settlements Govern- ment, the West African Commissioners and Hong Kong & Shanghai Banking Corporation amounting in all to £1,800,000.
During the year £400,000 of this was repaid.
The loan has been issued to applicants with two or three exceptions on the security of mortgages on land or shares. In- terest is payable quarterly at the rate of 8% per annum increas- ing 1% per annum every half year, with the proviso that when the interest is 9% or over, 1% is deducted if such interest is paid within ten days of being due.
The financial dealings of the Trade Loan are kept separate and distinct from the Colonial Government Account. An account is kept with the Hong Kong & Shanghai Banking Corporation in Hong Kong which is a debit account secured by the deposit of gold with that Bank in London.
It was realised that the effects of any sudden drop of the silver exchange would have to be carefully guarded against. The loan to the Hong Kong Government was in sterling and interest on such and repayment would have to be in sterling. On the other hand the loans to persons in Hong Kong are in silver and repayment is also made in silver. Since the loan was initiated and up to the present time the dollar has dropped about 4d, in sterling value. Thus if sterling had been changed into silver this would have meant a very serious loss.
This difficulty was overcome with the assistance of the Hong Kong and Shanghai Banking Corporation. Under the ordinance governing their note issue, they can issue notes in Hong Kong on certain conditions as to cover. The sterling lent by lenders to the Hong Kong Government has been deposited with the Hong Kong and Shanghai Bank and as the other securities held by the Bank against their note issue, have always been sufficient to cover their note issue, this gold deposit has been treated as a deposit upon which the Hong Kong and Shanghai Banking Corporation allows the Hong Kong Government 11% per annum. This deposit must always be sufficient to cover the debit work- ing account of the loan in Hong Kong.
No comments yet.
Private notes are available after approval.