CO129-330 - Public Offices - 1905 — Page 229

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money was in their Bunkers hands in New York prior to its being paid over, and this amounted to £236.6.0, so that, deducting this sum from the other two, the cost of the transaction works out, as I have said, at £783. 7. 6. 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. 7. 6. so that the indebtedness of the Colonial Government to us is £1,100,783. 7. 6.

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 economical 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 bome as at present by the Hong Kong Government.

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