CO129-549-1 Remittance of funds between Hong Kong and London 12-2-1934 - 14-2-1935 — Page 16

15

and the Treasury Chest Officer direct either

(a) Hong Kong could have got the sterling remittice

at the price she actually paid and the Treasury Chest

Officer would have got his dollars for £150 less

or (b) they could have 'split' the difference and each

have saved £75.

This case, however, seems quite contrary

to the arguments in the Colonial Treasurer's minute

generally - in fact he immediately proceeds to

disprove the case by reference to the quoted rates.

We have no evidence to show whether the Treasury

Chest Officer gets any specially favourable rates

or merely the 'paper' rates. Generally, the

argument is that the Colonial Treasurer, not being

bound to remit at any particular date waits for a

specially favourable time and then gets, due

apparently to his happy relations with the Hong Kong

and Shanghai Bank, a high sterling rate, still

more favourable than the 'paper' rate. On the

other hand a favourable rate for the Treasury

Chest Officer is the converse of a favourable

rate for Hong Kong, as naturally the Treasury Chest

Officer wants to buy dollars at the lowest rate

possible. While the natural desires of both

parties are therefore diametrically opposed, it

is conceivable (as in the case quoted) that on

occasion a direct arrangement would be to their

mutual advantage, but apparently such a condition

would be quite rare. Taking the 'paper' rates

(which show a difference between the buying and

selling rates for sterling) as a normal condition

it is obvious that any splitting of the difference

between