CO129-576-4 Loans for public works 3-7-1939 - 4-1-1940 — Page 48

to Treas (6)

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COPY FOR REGISTRATION

53593

مدیر

Telegram from the Governor of Hong Kong to the Secretary of

State for the Colonies.

Dated 20th November, 1939. Received 10.7 a.m. 20th November,

5

48

No.409 CONFIDENTIAL.

In view of (a) increase of advances against loan

accounts, which are expected by 31st December to amount to nearly

the whole of the nominal surplus; end (b) desirability of

increasing liquidity of the nominal surplus, it is desired to

issue balance of the 1934 3 loun i.e. 11 million dollars in

the near future. Hong Kong and Shanghai Banking Corporation

a

advises that the price of the local issue should be 93.

Price

They anticipate having to take up the greater part of the issue

themselves. Other banks which have been sounded do not appear

to be in a position to take up any substantial amount.

suggested means an effective rate of interest of 4.34% which is

disappointingly high. I shall be glad of your views as to

whether there is any possibility of raising the sterling loan

of equivalent amounts in London at a lower rate of interest

whether by issue to the public or through the Crown Agents for

the Colonies direct loan scheme and if so whether permission

could be obtained to raise such a loan. If however it is not

possible I propose to proceed with the arrangements for the local

issue before the end of this year at above price. Bulk of the

proceeds would in any case be invested in short term investments

or placed on fixed deposit for a substantial period as no

immediate need of the cash is foreseen.