CO129-429 - Public Offices & Others - 1915 — Page 48

(a)

(b)

11.

the facilities socorded to their German rivals. Facilities,

which they state they would never have been likely to receive

from British Banks. The generel opinion among British mer- chants in Hongkong is that the Germans received financial facilities from British Banks and Discount Houses, which coulą not have been obtained by themselves. This is a very strong statement, which is very difficult to prove, and depends on questions of individual credit and standing, but I forward

it with all reserve as being the opinion of the majority of

the Liquidators in Hongkong. The fact remains that practically all the German Houses were receiving D/A terms, while the

majority of the British Firms financed their business by means of the ordinary 4 months Draft, Documents against payment, nanced by the Banks, and carrying 6% interest. Whenever a

Bill is renewed, or the goods are placed on loan, all interest

is paid to date, and a margin of 10-25% handed to the Bank

as additional security.

I would like to bring the London Acoeptance systom to the

serious attention of British merchants. It has the following

principal advantages.

A saving of as much as 2% on interest during times of nor-

mal bank rate.

In the case of the London Discount Houses, the telegraphed

remittance can be made through any Bank, and therefore the

lowest rate of the day for T.T. on London can be taken, which

frequently entails an economy of as imch as į to † %.

The time has come, in the interests both of British finan-

ciers and merchants, that the terms of letters of lien should

be strictly enforced, so that the system of long oredits originated by the German Firms should be rendered impossible,

and in order to foster fair competition on a cash basis.

Exports. German Exports all over the world were financed

by Drafts on London against Bankers Letters of Credit.

Dresdner Bank and the London and Hanseatic Bank handled a

The