CO129-482 - Public Offices - 1923 — Page 792

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The Treasury Chest Officer has accordingly

with the approval of This Board offered to take over

the surplus balances of the Colonial Government, and

to pay for these in sterling in London at 1/16th of

a penny per dollar more than the Hong Kong and

Shanghai Bank's published selling rate, (at which he

etates that the Colonial Government have hitherto, with

rare exceptione, been accustomed to remit).

It is obvious that some such arrangement is

of advantage both to the Colonial Government and to the

Chest, both of which contributed under the old system

to the profits of the Bank in respect of transactions

for which the services of an intermediary are not

necessary.

It appears however that some difficulty has

been experienced in coming to an agreement locally,

and

x

and My Lords would be much obliged if His Grace would

take the matter into consideration, and would ascertain

whether the Government of Hong Kong would be willing to

enter into an agreement with the Treasury Chest Officer

to allow him the first refusal of all balances which

they desire to remit to this country and if so on what

terms.

It is relevant to add that the work of the

Treasury Chests in supplying local currency for the

needs of the Imperial, Naval and Military forces is

carried out at a loss, and that My Lords confidently

assume that the Government of Hong Kong will be

desirous of helping to minimise this loss, so far as

the Hong Kong Chest is concerned, if arrangements can be

made by which they will be able to remit through the

Chest at rates not less favourable than those normally

to be obtained through other channels. There may be

some difficulty in determining the basis of such rates,

since the Bank will (as My Lords understand has already

happened on one occasion) be likely at the present time

to