34
to date, and the fact is that it would be difficult to purchase any quantity of Govornont bonds on the local stock exchange. When a new issue is ado, the bonds are taken up by institutions and individuals who, broadly speaking intend to hold thơm until maturity, and the quantities coming on to the markot are very sall indeed. It therefore soas questionable to ne whether it is sound to restrict the circle of possible subscribers to a dovermont Loan (which is already all) because of possible dangers which in all probability will nover arino.
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In any event, it wo là bo qite out of the question at the presont time to launch any promium iosuo, as it would not be possible to form a syndicate who would be prepared to tako up the bonds on a sufficient Boalo. The stock :arkot raning depressod though conditions are better than they were some weeks ago. The whole position is over-shadowed by the uncertaintios of the political situation and it would be unrise to attempt to Moat evon a straight issue until those uncertainties are to some extent resolved. It may be that if the Communists, after Canton has been occupied, slow at least an initial desiro to res me nor al trade through Hong Kong, conditions will improve at last temmorarily to a point when it wil be possible to consider a fresh insho. If sich an improve vent doos matorialiso, I should like to be in a position to take advantage of it to make a further iso é of twonty million dollars of the 34 por colt Loan. I should, thorofore, be grateful if I could be informod as noon as possible whether some form of restriction will be insisted on in spite of the point made in the latter half of paragraph 3, and, if it takes the form of the a gesti n in paragraph 4 of your "telegram (14) on '48. No. 1245, whether it will be necessary to abody this condition
in the wording on the bondo. It is importaat to bear in mind that any form of restriction will certainly reduce subscriptions by some millions, and that it will be by no meaus casy to dispose of oven twenty dllion dollars' worth of bonds.
G. G. S. FOLLOWS.,
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