CO129-597-3 Estimates 1950 22-2-1949 - 3-11-1950 — Page 274

270

of exchange control leakage.

5. Portsmore, after investigating the matter on the spot, expressed the view that the danger of leakage was more apparent than real as long as the bonds were expressed in Hong Kong dollars and not in sterling denominations. In this form they are in practice extremely difficult to dispose of ex- cept on the Hong Kong stock exchange, and would certainly not prove attractive to persons whose only object was the export of capital. I gather that the Bank of England accepted Port- smore's views but up to the time I left London the Treasury had not given any indication as to whether they had modified their attitude in regard to bearer bond issues.

6. There is no immediate urgency about a further loan issue, but I should like to clear up this bearer bond question so that the way will be quite clear when it becomes necessary for us to borrow again. We should therefore be most grateful if you would continue to press for an early decision on this point.

Yours sincerely,

(sgd.) (?)

}