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I have been considering whether (?tap)' issue would be preferable to issue for fixed amount and have come to conclusion that issue in first instance for 50 million dollars will be most satisfactory, as it will afford opportunity for testing the market. We cannot afford to risk possibility of loan being a failure, as this would have adverse effect on prospect of raising loan in London later on. If initial issue is for 50 million dollars, success would be assured if applications from the public total even 25 million dollers, sg Hong Kong bank would be prepared to take up balance. This test of the market will furnish us with valuable informazion regarding possibilities of further issue. If all 50 million dollars forthcoming without Hong Kong bank participation, further issue can be made to take up bank's money and any further amounts which are likely to be forthcoming, Thus local market could be exploited to the full.
5.
Enquiries revealed that lodal fims who would normally be prepared to invest considerable sume in a loan of this neture are unlikely to do so unless there is some Government announcement that, so far as can be foreseen, there is no reason to suppose that present exchange rate between Hong Kong dollar and sterling will be varied. I take it there would be no objection to such a statement, but would be grateful for confirmation of this, Declaration would not; of course, amount to ́any sort of guarantee, but (conrupt spelling group of 5 letters) consider(s) it would, make all the difference as far as local applications are concerned.
6.
Settlement of bank liquidation pool account will free funds, for investment and it is important that this should, if possible, be completed before loan comes on the market. Should, therefore, be grateful for early reply to my savingram No. 239 of 7th October,
/see file
15488/62/460.
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I doubt whether there would be any advantage in charging, to revenue proportion of items now provided for under special: expenditure and, in any case, this would not now be practicable as Estimates have been passed by Legislature.
W
JA
/I
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