CO129-553-5 Japanese activities in Macao and Canton 31-1-1935 - 22-11-1935 — Page 58

COPY.

CONFIDENTIAL.

Enclosure No.5.

HONG KONG AND SHANGHAI BANKING CORPORATION.

HONGKONG, 22nd August, 1935.

The Honourable

The Colonial Secretary,

HONGK O N. G.

Sir,

58

re THE MACAU WATERWORKS SCHEME.

We have the honour to acknowledge receipt on the 10th

instant of your letter No.1/1715/35, and in accordance therewith

enclose a copy of a suggested form of Guarantee.

You will realise that it is difficult to frame a Guaran-

tee to suit all the possibilities of the case, but this Corpora-

tion would, of course, trust to the Home Government to carry out

the terms thereof in the spirit in which it would be entered

into.

With regard to the limit of the Guarantee, it would

appear to this Corporation that the Guarantee should cover any

loss on Capital subscribed or loans advanced by this Corpora-

tion and the Macau Mlectric Lighting Co.Ltd., for the reasons

covered by the Guarantee up to the amount expended by the

Syndicate in the financing of the necessary Companies to

operate the Waterworks, less any sums which may be repaid to

the Syndicate or its successors in title by way of return of Capital and/or repayment of loans advanced in the event of the

possible rendition or cession of the Colony.

For your information it is anticipated that the total Capital cost will be, as stated in our letter of the 2nd August, approximately $2,000,000, of which $500,000 has already been invested by way of share capital, and the balance will be lent on loan. We have no information as to

how the figure of $1,000,000 mentioned in your letter now

under reply was arrived at.

A