54126/4/46
5 218
19th August, 1946.
Dear Jamo8,
Your letter to Palmer 8.52892/04 of the 8th August about the Hong Kong Government loan. e note your assurance that from the capital issues standpoint the Treasury would raise no objection to the raising of a market loan in London. We note also however that you are advised that in view of the prevailing uncertainty about the political and economic future in the Far East, it would be improbable that, for the present at any rate, the Colony could raise money on its own credit on terms likely to be consistent with the general basis of similar issues. e are not sure whether this is intended as a qualification of your assurance, 1.0. whether it implies that no guarantee can be given now, that when it becanos mecessary to raise the loan, permission would be forthcoming if the probable terms were out of line with those for "similar" issues, (by which I assume is meant other loans raised by Colonial Governments). If such a qualification is intended then, as we have mentioned to you in conversation, the Crown Agents would in effect not have any security on which to make advances. This point therefore is one on which we should be grateful for further Treasury advice.
Since you wrote, however, we have received Sir bark Young's deepatch on the Estimates, a copy of which will be coming over to you, In that despatch the Governor indicated inter alia that he considers a loan could not be raised locally before next year
R.L.. JANGS, B
TRZASUKY.
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