CO129-510-1 Correspondence concerning securities held against note issues by various banking corporations 28-2-1928 - 16-10-1928 — Page 31

Enclosure No. 3.

31

HONG KONG & SHANGHAI BANKING CORPORATION.

The Honourable

The Colonial Treasurer,

Hong Kong.

Sir,

Hong Kong, 8th February, 1928.

HONG KONG AND SHANGHAI BANKING CORPORATION

NOTE ISSUE.

I must apologise for again troubling you over

the question of security for any temporary increase in this Bank's Note Issue but, although I stated in my letter of 17th October 1927 that the suggestions made by H.M.Treasury

would entirely meet the Bank's requirements, I now find on

further consideration that a deposit of Gold in San Francisco

would be a cumbersome procedure involving risks of exchange

in transferring the money to and from London and San

Francisco in addition to other expenses. Our London Manager,

Sir Newton J. Stabb, has suggested that the most convenient

arrangement would be that sovereigns should be earmarked by

the Bank of England on behalf of the Crown Agents and he has

had an interview on the subject with an official of H.M.

Treasury.

I will, therefore, be grateful if you will re-

open the question with the Colonial Office; Sir Newton Stabb

has asked me to state that if any further information is

required he will be very pleased to furnish same.

I