CO129-576-4 Loans for public works 3-7-1939 - 4-1-1940 — Page 38

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6. We would observe that issue to the public at so big a

discount as 93 offers a very great attraction to speculators.

Holders whose bonds were drawn at the first redemption date

would receive a bonus of seven points in addition to the 31%

interest, i.e, a return of 11.3% per annum if the drawing took

place one year after issue, or 18.8% per annum if it took

place six months after issue.

7.

Finally, it appears to be a question whether the whole

of the unused borrowing powers under Ordinance 11 of 1934 need

be exercised. The Government's desire for liquid surplus

assets may perhaps be met by converting into some other form a

part only of the $11,140,000 which it has advanced for loan

works. Moreover, some portion of that amount might well be

written off permanently as paid out of revenue seeing that,

during the period for which the issue has already been

postponed, the savings mentioned in the latter part of

paragraph 4 above have been, in effect, accruing.

I have the honour to be,

Sir,

Your obedient Servant,

Chamoni

for CROWN AGENTS.