Sessional_Paper_1917 — Page 95

3568/15.

91

No. 5.

No. 4.

No. 3.

GOVERNMENT HOUSE,

HONGKONG, 27th May, 1916.

SIR, I have the honour to acknowledge the receipt of your confidential despatch of 6th April, making enquiries with regard to a certain combination of the importing firms here.

2. What I referred to in paragraph 6 of my confidential despatch of the 9th February was an agreement between all the British importing firms, come to at a meeting of a section of the Hongkong Chamber of Commerce shortly after the expulsion and internment of enemy subjects, that no goods would be delivered in future to Chinese dealers except for cash. The Chinese dealers accepted without any opposition this sudden shifting of the trade from a credit. basis to a cash basis, although in many cases they were entitled under their contracts to obtain delivery on credit. The only concession made by the importing firms was to allow 2% discount. The new system appears to have worked well, but of course if there were any large number of importing firms who refused to do business only on a cash basis it would be necessary for the other firms to re-consider their position.

3. The long credit system is said to have led to speculation and over- trading, and the opinion has been expressed here that the Chinese themselves do not disapprove of the recent change to a cash system.

No. 7.

The Right Honourable

The Secretary of State,

&c.,

&c.,

Hongkong.

&c.

I have, etc.,

No. 6.

F. H. MAY,

Governor.

DOWNING STREET,

23rd May, 19 16.

Siu,----I have the honour to transmit to you the paper noted below on the subject of credit facilities extended to German firms in Hongkong,

I have, etc.,

A. BONAR LAW.

The Officer Administering the Government of

HONGKONG.

C. 12880.

No. 7.

BOARD OF TRADE, (COMMERCIAL. DEPARTMENT),

GWYDYR HOUSE, WHITEHALL, LOxpox, S.W.,

1st May, 1916.

SIR, -With further reference to your letter (No. 58139 15) of the 16th February last, I am directed by the Board of Trade to state that the question of the credit facilities extended to German firms in Hongkong by the “London Acceptance" system of the discount banks, was brought before the Advisory Committee on Commercial Intelligence at the meeting held on the 11th April.