CO129-546-1 Loans for public works 6-1-1934 - 14-8-1934 — Page 76

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COPY FOR REGISTRA..

REC IND

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17 MAR 1934

C. O.

·Y

PARAPHRASE TELEGRAM from the Governor of Hong Kong to the

Becretary of State for the Colonies.

Dated 16th March, 1934.

(Received Colonial Office 1.52 p.m. 16th March, 1934)

No. 44. Confidential.

(6)

79

Sufficient

With reference to your telegram No. 6 Confidential

concerning Loan proposals. The matter has been further

discussed and I am satisfied that 14,000,000 dollars can be

raised by a local loan at 3% with a currency of 25 years, 831

issue price of 98 and redeemable by drawings at par.

monay will thereby be provided to liquidate present 34% sterling

stook if old sinking fund and Public Works Loan sinking fund and

invested surplus funds are realised, and will leave approximately

11,000,000 dollars for loan works which will suffice in first

instance. The Chief Manager of the Hong Kong and Shanghai Bank

who was approached first expressed the view that a 3% loan wag

impracticable, and considered 4 to be the lowest possible rate

at which the amount required could be obtained. However the

Chartered Hank of India and the Peninsular and Oriental Bank #:12

take a fim 10,000,000 dollars leaving 4,000,000 dollars to the

public, and will also take up any amount not subscribed by the

publio. The assent of the London Boards of both Banks has beon

given, and you can if necessary refer to them for confirmation..

The Chartered Bank have agreed to manage the Loan. Negotiations

with those two Banks have been undertaken in the strictest

confidence and without the knowledge of the Hong Kong and

Changhai Bank. Subject to your concurrence six months notica

of the redemption of sterling stock,with effect from the 15th

April 1931 should be given. In my opinion the above terms

are very favourable and should be adopted.

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