CO129-450 - Acting Governor Claud Severn - 1918 [10-12] — Page 189

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remaining $1,500,000 can be raised here at the most favour- able time in the near future, but the work of redemption

need not await this operation as there will be ample funds

from the Bank's subscription and from surplus balances of

the Colony to keep the work going for some time to come.

4.

I would, therefore, suggest that, if

you approve of the scheme, instructions should be issued forthwith to the Crown Agents to purchase Hongkong Inscribed Stock at or below 70 and to draw on the Colony for that

purpose: it being anticipated that the rate of exchange will

be at or above 3/- the dollar.

5.

I should also be glad to receive your

approval by telegraph so that the necessary legislation,

which is now being prepared, may be effected as early as possible, it being proposed to enact a law similar to Ord- inance No. 12 of 1916, regard being had to the variations

of conditions.

6.

The advantages of the proposed scheme

may be summarised as follows:-

-

(1). The annual charge in the Estimates will

be less than that hitherto borne;

(2). the annual amount to be provided will in

future be a fixed sum not subject to variation on

account of exchange;

(3). the Loan will be extinguished in 1942

whereas, under present circumstances, it would entail

an annual charge for some years longer;

(4). the advantage in (1) will increase as the

rete of exchange falls and it may reasonably be anti-

cipated that the price of silver will, in a few years

sfter the war, approximate more to the prices in force

before the war; and

(5). as an indirect advantage the money spent

on purchase of the stock in London mey be considered

a8