CO129-561-10 Estimates 1938 2-9-1937 - 23-9-1938 — Page 35

म 7°

ALL COMMUNICATIONS

TO BE ADDRESSED TO THE

CROWN AGENTS FOR THE COLONIES,

THE FOLLOWING REFERENCE AND THE

DATE OF THIS LETTER BEING QUOTED.

A/682

TELEGRAMS:

TELEPHONE:

"CROWN. LONDON'.

ABBEY 7730.

K(13

Sir,

CROWN

AGENTS

FOR

THE

COLONIES

12

35

4, MILLBANK,

LONDON, S.W.1.

23rd April, 1938.

11.

I have to acknowledge the receipt of your letter

dated the 14th April, No. 53652/37, transmitting a copy of

correspondence with the Governor of Hong Kong and requesting

our observations on the question of a possible increase in the rate of interest for new borrowing in the near future.

We understand that, when it is decided to raise a

further instalment of the loan authorised by Ordinance No.11

of 1934, the money will be borrowed locally;

2.

but that the

outlook on the London market for loans is desired as some

As to this, we guide to its possible course in Hong Kong.

agree with the views expressed in paragraph 7 of the Governor's despatch, but would point out that there is

always a possibility of international uncertainty or some other influence causing a fall in the price of gilt-edged securities and a corresponding rise in interest rates which it was impossible to foresee even shortly before its

occurrence.

At present, Colonial Governments may expect to

be able to borrow at rates less than 3% and such low rates, as far as can be foreseen, are likely to remain in force for some time to come, though, as stated above, a sudden change may be caused at any moment by some event such as the recent

German-Austrian crisis.

I have the honour to be, Sir,

Your obedient Servant,

The Under Secretary of State,

COLONIAL OFFICE,

S.W. 1.

J.S. W. Hard

Hood

CA