CO129-605-5 Government loans 4-2-1948 - 8-1-1949 — Page 28

54126/4/48

The Church House,

Great Smith Street,

19.

London, s.7.1.

24

8

Jammiy, 1949.

"Dear David

Would you please refer to Marshall's letter to Fortsmore of 21st December, 1948, regarding the raising of loans in Hong Kong in the form of bearer bonds. we do not appear to make much progress in this matter, and as the whole question of the form in which future borrowing by Hong Kong must now be considered, perhaps I may put all the relevant facts before you as we see them.

2.

Fortamore in his letter to Marshall of 14th December agreed, somewhat reluctantly, that registration need not be insisted upon in the case of the $50,000,000 already issued in the form of bearer bonds. As regards any further issues, he raised the following points :-

(a) whether events in China would render a

registered issue more attractive than formerly;

(b) whether it would be possible: (1) for

bearer bonds to be issued only to Hong Kong residents; and (11) for interest payments and redemption money to be restricted to residents or to persons who were resident when they purchased the bonds.

The above points were embodied in our telegram No. 1245 to which we have now received a reply, a copy of which I enclose. You will see that the Governor answers (a) in

D.B. PITELADO, ESC

/ the