CO129-605-4 Government loans 12-7-1946 - 6-1-1948 — Page 140

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5 Finally, you may wish to warn Hong Kong against providing that the fund may only invest in self stock. If the fund my only invest in self stock there is a danger that the price may be put up against it when the market knows that the fund is obliged to make regular purchases of a certain security. The right provision is for the sinking fund to have power to invest both in self stock and in any other suitable Government security, with the proviso that any self stock bought by the sinking fund is cancelled.

I am afraid you will need, in the light of this letter, to revise (b)(a) and (e) of the draft telegram sent to me by Mayle on the 29th January.

Yours sincerely,

Du Sapun

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