CO129-468 - Governor Sir Stubbs - 1921 [6-8] — Page 146

Hongkong and Shanghai Banking Corporation,

145

Hongkong, 13th June, 1921.

The Honourable,

Sir,

The Colonial Secretary,

HỒNG K Ô N G.

I have to thank you for your letter of 9th enclosing copy

of a telegram received from the Secretary of State for the Colonies.

I note that the Secretary has no objection to the proposed

increase of our authorized capital to $50 millions, A meeting of

our Shareholders will therefore be called in due course to sanction

this increase.

I note, further, that the Secretary does not approve of

any alteration in the matter of the fiduciary issue of notes, which

will remain as at present provided for in the Bank's Ordinance.

The increase of the Bank's capital from $15 millions to

$20 millions will however carry the privilege of depositing securitie

at our option, instead of coin for $5 millions more than we are

allowed to do at present.

I note that the Secretary has no objection in principle to

coin reserves being held at places outside of Hongkong where the Bank has note issues, and that he is consulting the Foreign Office as

to the safety of such deposits of coin and as to whether Consular

Officers can act as Trustees for your Government. I would observe

that the Consul General at Shanghai has already acted in the capacity

of Trustee on several previous occasions. The Secretary states also

that the Treasury is inclined to consider that these resebyes should be kept only at accessible points such as Tientsin & Shanghai.

The pints where we propose to increase our note issue are Shanghai, Tientsin, Peking, Hankow and possibly Amoy & Foo chow, and we should like to have the option of keeping the reserves against these issues on the spot. If, however, it is decided that only Shanghai & Tientsin are suitable, I would suggest that the coin reserves beld against the notes issued at the other places mentioned should be

deposited