CYPHER
نه
CYPHER/CAT A
IMMEDIATE FOREIGN AND COMMONEALTH OFFICE
TELEGRAM NUMBER 403
TO ALGIERS
21 NOVEMBER 1968.
CONFIDENTIAL.
ADDRESSED TO ALGIERS TEL NO 403 OF 21/11 AND TO ANKARA ATHENS
BELGRADE BUCHAREST BUDAPEST BUENOS AIRES CARACAS HONG KONG
(FOR U K TRADE COMMISSIONER) KUALA LUMPUR KUWAIT LUXEMBOURG MADRID
MEXICO CITY MOSCOW PRAGUE RIO DE JANEIRO SINGAPORE TEHERAN WARSAW,
STATEMENT BY CHANCELLOR OF THE EXCHEQUER.
YOU MAY DRAW ON THE FOLLOWING IN EXPLAINING THE NEW MEASURES.
MEASURES WE ARE TAKING TO RESTRICT CREDIT ARE CONSISTENT WITH ADVICE WE HAVE RECENTLY BEEN GIVEN BY OECD AND IMF. BUT WITHOUT ADDITIONAL STRENGTHENING, CONVENTIONAL RESTRAINTS WOULD TAKE TIME TO WORK THROUGH AND MAKE THEMSELVES FELT ON OUR BALANCE OF PAYMENTS WHICH HAS NOT IMPROVED AS FAST AS WE HAD HOPED. MEANWHILE INTERNATIONAL MONETARY CRISIS OF FORMIDABLE PROPORTIONS HAS DEVELOPED. WE MUST THEREFORE TAKE THESE DRASTIC MEASURES TO CONTAIN DEMAND IN BRITAIN AND THUS TO DEMONSTRATE OUR DETERMINATION TO PURSUE STRATEGY TO WHICH WE PUT OUR HAND AT TIME OF DEVALUATION.
2. FOR TECHNICAL REASONS WE HAVE HAD TO REFER TO IMPORT DEPOSITS AS QUOTE A DUTY OF CUSTOMS UNQUOTE. BUT IT MUST
BE MADE ABSGLUTELY CLEAR THAT WE ARE NOT IMPOSING A DUTY OF
FIFTY PER CENT NOR ANY KIND OF LEVY OR DUTY. DEPOSIT IS REPAYABLE AFTER SIX MONTHS AND WILL NOT BE RETAINED BY THE GOVERNMENT: IT IS IN EFFECT SOLELY A TEMPORARY FREEZING OF FUNDS.
3. WE HAVE CHOSEN THIS METHOD BECAUSE
(1) IT WILL OPERATE QUICKLY
(11) ONCE THE INITIAL IMPACT HAS BEEN FELT IT WILL HAVE
ONLY A MODERATE EFFECT ON TRADE OF OTHER COUNTRIES
(111) IT WILL BE TEMPORARY AND ITS OPERATION RELATIVELY SIMPLE AND STRAIGHTFORWARD.
/QUANTITIVE