CO129-390 - Acting Governor Claud Severn - 1912 [5-6] — Page 337

CONFIDENTIA L.

C

مدعا

18381

2.0.

325

#39 16 JUL 12

GOVERNMENT HOUSE,

HONGKONG,

20th. June, 1912.

Sir.

I have the honour to confirm my telegram of

the 13th. June which was as follows:

With reference to my telegram of 30th. May owing to high rate of exchange which is believed to be temporary pro- -pose that 81,473,000 should be paid by overdraft from Hongkong and Shanghai Bank 41%. Despatch follows by mail: and to inform you that payment of the money required for the re- -sumption of the various lots in connection with the proposed site of the Railway Terminus has been arranged by over-draft from the Hongkong and Shanghai Bank at 4 per centum.

2.

I have preferred this method of financing on account of the present high rate of exchange a rate which, I am advised, must fall in the course of the next few years, and which therefore renders an exchange operation of such magnitude, for the

present, undesirable.

The addition of 1 per centum to the rate of interest as compared with the rate of 34 per centum or thereabouts payable on money borrowed at home, will be covered even if the rate

of exchange were to fall only id. in the course of a year and it is expected that that amount of decrease in the value of the dollar

will be exceeded in the near future.

HE RIGHT HONOURABLE

LEWIS HARCOURT, M.P.,

&C..

&c.,

&C...

3.