Governor answers (a) in the negative; and para.2 of
the savingram implies that conditions (b)(i) and (ii)
are satisfied in practice (apart from a negligible
amount of $150,000) although there have been no such
conditions laid down when the bonds were issued.
3. Portsmore also raised three more points,
し
which have not been put of Hong Kong his letter won intregment to me lot no.1245):- (14)
(which were not put to Hong Kong)+
(i) Why is it so difficult to market registered
issues in Hong Kong? The answer appears to
be that the Chinese will not subscribe to a
loan which is in a form which imposes any
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restriction on the ready sale.
(ii) What would be the attitude of Hong Kong
towards an application for official U.S.
in respect of interest or redemption money
due to a resident in the U.S.A.? Admittedly
we have no information on this point, but it
seems from the experience of the first issue
of $50 million that any purchase by, or
transfer to,a non-resident is very unlikely.
(iii) Whether registered bonds where the interest
is paid by means of coupons to bearer might
be acceptable?
-Except of course to Chimer with dual residface,
We understand that even if the original purchaser
of the bond were registered, the Chinese have evolved a
the
system of transfers where the space for 4 transferee's
document
name on the transfer arrangementis left blank, and the
bonds may thus pass through many hands before any
alteration is recorded in the register as to the owner.
It appears therefore that in the circumstances
3
of Hong Kong, bearer bonds are the only practical means
of raising a local loan and the Governor in para.3 of
again
his savingram enclosed, states this quite categorically.
In these circumstances if Hong Kong is to raise any
further amount locally it seems that it must be in the
partly to Escape
taxation and partly heause of the lack of sicure postal
wwvices htwren the Chiness Limbuland
and
tong Kong,
/form
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