COPY
SAVINGRAN
seretariat File No. 1/2062/46.
CONFIDENTIAL.
To the Secretary of State for the Colonies.
From the Governor, Hong Kong.
Date 7th April, 1948.
No. 235.
85
Your telegram No. 334.
Rehabilitation Loan ordinance.
I do not ocnsider that any setion can now be taken for registration of Bonds of First Issue amounting to £50,000,000 which has already been made. The possibility of requiring
onds to be deposited with approved banks, as has been done in the United Kingdoa; la » wider question as it would be u#0688&ly to apply such measures to all bearer securities and not merely to this last logue.
Practically all local is ues are bearer and you will recollect that in paragraph 4 of my telegram No. 990 of the 9th Leptember, 1946, at muk stuted, as the considered view both of this Covernment and of the then Financial Counsellor to Hisajesty's basay, that to be successful it was absolutely necessary that an issue should be in the form of Searer condɛ, This spźlies with even more force to & premiu. Bond Issue and I have no doubt at all that insistence on registration would › result in the complete failure of such an issue.
Portamore is examining this question of centrol of securities and his views will no doubt be expressed in his report. But although he has resued no final conclusion he shares, I think, ow view that the danger of exchange control leakage is much lose thell uppenre likely from the Lonion end, securities expressed in Hong Kong, dollers would not find a r sdy market outcide rong ong, and a person wishing to purchase 1. against longong dollars can do so on any of the many free park、te in the ar Leat much more simply then by sole of bucrer securities,
Copy of prospectus and details of sources of subscriptions to First Issue of Pehabilitation Loans are bein, forwarded separately.
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