CO129-330 - Public Offices - 1905 — Page 191

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on political lines. If the former, the course of action

which we and our brokers have taken has been right and in

the interests of the Colony. If however political consider-

ations are to be the governing factor then we should be in-

structed accordingly. In such case however it must be dis-

tinctly recognized that the Colony will have to pay for

disregarding business principles and that it will be the

English Banks and not the Colonial Government which will pro-

fit by such transactions.

4. At present our Bills are sold to the highest

bidder or, more frequently, distributed among all the Banks,

English or Foreign, at the rate quoted by the highest bidder

and under this system the Colonial Goverment ohtuins the

fullest benefit of competition. If however the Bills vere

offered only to the English Banks they would agree among

themselves a rate which would be mutually satisfactory to

them and the Colony would have to bear the consequences of

dealing with a ring. The Foreign Banks also would still be

under the necessity of making remittance to China and would

either have to import silver or go to the English Banks to

assist them in the matter, but in such case the profits on

the transactions wo le go into the pockets of the English

Banks instead of into that of the Colonial Government.

5. Such being the farts of the case we fail to soe

that the sale of our Bills to the English Banks only could

be justified. on business grounds, but if the Secretary of

State should decide that political considerations should be

given the preference there will be no difficulty in corrying

arrangement into effect.

the

6. As to the special claims of the Hong Kong and

Shanghai Bank to corsideration we think that Sir M. Mattan

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is