14 days of their due date premissory notes
issued by the Tunnel Company and bought by the lending bank.
3. This, together with the various
conditions and stipulations discussed at the meeting, seemed to us a very fair compromise, and we thought that the essentials had been settled, subject to their formal acceptance by the Hong Kong Executive and Legislative Councils. We were thus dismayed to get a letter from ECGD on November 1st, after the Hong Kong representatives had returned to Hong Kong, stating that there were a number of additional "consequential details" which would have to be
put to Hong Kong. These were:
(a) in the event of any default at the
fourteen day point, ECGD would have the right to call the whole of the
debt;
(b) ECGD would have the right to pursue if the Hong Kong Government account
were to be removed. from the Crown Agents (i.e. the Government's London agents);
(c)
ECGD require an undertaking that the Hong Kong Government keep a minimum balance with the Crown Agents or whatever London agents they appoint.
4. Frankly we cannot accept that these are consequential details". They seem to us in fact to reopen to a very large extent the political point we thought we had settled in
Accord
namely Hong
our last talk with the Hong Kong representatives. And now there is a very big new factor, the fact of the devaluation of sterling. Kong is now just about the largest holder of sterling in the world. On several occasions in
the past two or three years a number of the local unofficials have raised the question of Hong Kong being allowed to move some of their reserves out of sterling into other currencies,
as a hedge against a possible devaluation. We have had to tell them that we could not agree to their doing so, because of the effect it could
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have
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