CO129-605-5 Government loans 4-2-1948 - 8-1-1949 — Page 63

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Mi Jasme

9/3

Mr Boss 10/3 it ane.

54126/4/48

BAFT CODE TELEGRAM

334

No

IMMEDIATE

Coded & sent-

1645hrs 10-3-48

あ

※

63

Capins to B/ (10). Tray (11)

GOVERNOR

73

HONG KONG

1947

Arr

RECEIVED 11 MAR 1948

In ci. U.D.

A. A sticks

1.

[6. Agents

CONFIDENTIAL

Your despatch No.1 Confidential of 6th January 1948.

Rehabilitation Loan Ordinance.

1. I understand first issue of $50,000,000 has now been made. Since issue of loan was approved the balance of payments and exchange position of sterling area has deteriorated especially in recent months and possibility of exchange control leakage is an increasingly serious concern. It is acoordingly most desirable that all bonds issued in Colonial territories should be registered and not (repeat not) in bearer form. Ordinance however includes provision, under Clause 7(7) for transfer by delivery, cover ing both ordinary and presumably. any premium bonds if issued subsequently under a subsequent Ordinance. Bonds would therefore be in bearer form and provide possibility of Exchange Control leakage.

2. Amendments to loan Ordinance to enable the bonds issued in Hong Kong to be made registerable would be as follows:-

Section 7 (4) Omit all words after "the day named in that behalf on the bond".

Section 7 (7) Omit entirely.

Section 8 (d)

Add words "and the conditions under which the bonds shall be transferable".

Section 8 (f) (Re-draft to read "to provide for the manner in which interest on the bonds

shall be paid",

the THUS

Section 9 Omit words "together in either case with all outstanding coupons attached to such bond". Provision for the registration of the bonds should then be included in regulations issued in accordance with Section 8 (a) as amended.

3. As issue of $50,000,000 has already been made, grateful to learn what arrangements could be made for ensuring that stock should now be registered or deposited. Appreciate that such action might seem to be contrary to terms on which loan was subscribed and might militate against future subscriptions but matter is of great importance. Grateful for your early comments.

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