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from which no doubt the Canton Government hoped to obtain a very
large portion of the subscriptions. Mr. Kallifax explained that the Bonds would constitute an illegal lottery under the Gambling
Ordinance of this Colony.
3.
Subsequently I had an interview with Sir Kai
Ho Kai on the subject. He argued that the Bonds differed from
Lotteries against which the Ordinance is aimed in that interest at
4 per centum is payable on each Bond and that the capital subscrib-
-ed is eventually repayable. He instanced the Ottoman and Paris
Municipal Bonds and argued that by analogy these might be pernit- -ted. I pointed out that the Bonds were clearly illegal under the law of this Colony and that there was no security for the payment
of interest or repayment of capital. Sir Kai Ho Kai admitted that
at present there was no such security. I said that I would refer
the question of the legality of the Bonds to the Attorney-Gene ral
and that if his view coincided with mine I could not allow them
to be dealt with in the Colony.
4.
The Attorney-General having endorsed my view
I caused the letter copy of which is enclosed to be addressed to
His Majesty's Vice-Consul at Canton and I instructed the Registrar.
-General to inform the District Watchmen Committee, of which the
leading Chinese in this Colony are members, in the same sense.
The Police have been warned to keep a sharp look out for the
introduction of the Bonds.
5.
As a further illustration of the financial
conditions prevailing in Canton I enclose an extract from the
Yang Ch'eng Pao of 9th. November which has been communicated to me
by His Britannic Majesty's Vice-Consul there. I also enclose
;translation of an interesting telegram addressed to the Central
Government by the Governor-General of the Canton Province on the
subject of the financial situation.
6.
I have sent a copy of this Despatch to His
helosure
molosure 44.
ssure 2.
Lajesty's
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