CO129-488 - Governor Sir Stubbs - 1925 [1-7] — Page 281

TELEGRAM from the Governor of Hong Kong to the

Becretary of State for the Celenies.

273

Dated 29th June

(Received Colonial Office 10.10 a.m. 29th June, 1925.)

A A A A

Priority.

Run on Native Banks last week pommission was

given to them to suspend operations temperarily this permission must now be withdrawn immediately in order

to avert financial crisis. Managers of the Hong

Kong and Shanghai Bank and the Chartered Bank stat ed

that they are prepared to finance Hative banks up to

#,000,000 dollars which they understand will save the

situation subject to the following conditions;

the

two banks will take over securities held by the Native

banks and will advance 1/3rd of the amount advanced

already on these securities subject to guarantee by

the Government that the two banks will suffer no less

whatever including non-payment of interest,

Government to absolve them from responsibility in the

event of any securities not being in order, as matter

is of such urgeney that time does not permit of

thorough serutiny. The Government will also after

two years' pay on demand to the two banks any balance

outstanding. The two banka shall be permitted to

isme notes to the extent of these special advances

covered by approved sterling securities to be specially

deposited with the Crown Agents fer the Colonies. The

this entail the Hong Kong and Shanghai Bank holding 100

than 1/3rd of the total note isme in silver, this

Chartered stipulation to be temporarily suspended.

Bank is not required to hold sover in silver and so is

not affected by this provision. Should heavy demand

for silver in exchange for notes arise Government to

take