CO129-336 - Governor Nathan & Public Offices - 1906 [11-12] — Page 475

CO129 Colonial Office Hong Kong Records 理藩院香港檔案 All AI Reviewed

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the risks of the drawing of the Debentures for redemption.

On the other hand the issue of Stock at a discount would

involve the creation of debt by the Colonial Government

to an amount considerably in excess of the £1,100,000

which has been lent to the Chinese Viceroy say to the

extent of 4% and the obligations in respect of this

debt would continue after the Chinese Viceroy would have

paid off the Loan made to him. On these grounds therefore

an issue of Stock would appear to stand condemned, but

there are certain other factors in the case which are

deserving of consideration.

9. In the case of the existing 3% Stock power

exists to pay off the Stock in April 1918 i.e. 2 years

after the expiration of the period at which the completion

of the repayment of the Loan to the Chinese Viceroy is to

be effected, and we would propose that advantage should

be taken of this power. The question therefore to be

considered is what means are likely to exist in 1918 to

enable the Colonial Government to avail itself of the

power of repayment at that date. The existing Stock of

the Colony is of the amount of £341,799 and we estimate

that the Sinking Fund in respect of that amount of debt

will be of the approximate value of £107,000 in April 1918. The creation of Stock to provide the £1,100,000 now

required will however necessitate an increase of the debt

of the Colony to the extent of about £1,145,000 and the question arises what provision can be made towards liquidating that debt in 1918, and this question has been rendered the more difficult by the provision in the Ordinance No.11 of 1905 that the Sinking Fund shall not commence until five years after the Loan has been issued.

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470 the risks of the drawing of the Debentures for redemption. On the other hand the issue of Stock at a discount would involve the creation of debt by the Colonial Government to an amount considerably in excess of the £1,100,000 which has been lent to the Chinese Viceroy say to the extent of 4% and the obligations in respect of this debt would continue after the Chinese Viceroy would have paid off the Loan made to him. On these grounds therefore an issue of Stock would appear to stand condemned, but there are certain other factors in the case which are deserving of consideration. 9. In the case of the existing 3% Stock power exists to pay off the Stock in April 1918 i.e. 2 years after the expiration of the period at which the completion of the repayment of the Loan to the Chinese Viceroy is to be effected, and we would propose that advantage should be taken of this power. The question therefore to be considered is what means are likely to exist in 1918 to enable the Colonial Government to avail itself of the power of repayment at that date. The existing Stock of the Colony is of the amount of £341,799 and we estimate that the Sinking Fund in respect of that amount of debt will be of the approximate value of £107,000 in April 1918. The creation of Stock to provide the £1,100,000 now required will however necessitate an increase of the debt of the Colony to the extent of about £1,145,000 and the question arises what provision can be made towards liquidating that debt in 1918, and this question has been rendered the more difficult by the provision in the Ordinance No.11 of 1905 that the Sinking Fund shall not commence until five years after the Loan has been issued. -4- 10.

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470 the risks of the drawing of the Debentures for redemption. On the other hand the issue of Stock at a discount would involve the creation of debt by the Colonial Government to an amount considerably in excess of the £1,100,000 which has been lent to the Chinese Viceroy say to the extent of 4% and the obligations in respect of this debt would continue after the Chinese Viceroy would have paid off the Loan made to him. On these grounds therefore an issue of Stock would appear to stand condemned, but there are certain other factors in the case which are deserving of consideration. 9. In the case of the existing 3 % Stock power exists to pay off the Stock in April 1918 i.e. 2 year s after the expiration of the period at which the completion of the repayment of the Loan to the Chinese Viceroy is to be effected, and we would propose that advantage should be taken of this power. The question therefore to be considered is what means are likely to exist in 1918 to enable the Colonial Government to avail itself of the power of repayment at that date. The existing Stock of the Colony is of the amount of £341,799 and we estimate that the Sinking Fund in respect of that amount of debt will be of the approximate value of £107,000 in April 1918. The creation of Stock to provide the £1,100,000 now required will however necessitate an increase of the debt of the Colony to the extent of about £1,145,000 and the question arises what provision can be made towards liquidating that debt in 1918, and this question has been rendered the more difficult by the provision in the Ordinance No.11 of 1905 that the Sinking Fund shall not commence until five years after the Loan has been issued. -4- 10. 4

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