UK guarantee
South China morning Post. Sept 8, 1973. on reserves not
a fait accompli
By MALCOLM SURRY, FINANCIAL EDITOR
The Financial Secretary, Mr Philip Haddon-Cave, does not regard Thursday's controversial bulletin from Whitehall on the extension of the sterling reserves guarantee agreement as a fait accompli.
He said last night: "It seems that the proposals have possibilities, but there are several points to be spelled out in much more detail before we can take a firm view."
The Financial Secretary added firmly: "I feel we could not accept a further agreement unless Our obligations are more limited and our rights are more worthwhile."
Mr Haddon Cave flew back last night after gruelling talks in London with consortia vying for the mass transit contract.
Two hours after his flight left London, the Treasury decided to extend the guarantee agreement, which affects our $9,000 million in the UK kitty, for a further six months on terms which have been bitterly criticised in the Colony.
MR HADDON-CAVE
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NZ welcomes
guarantee
Wellington, Sept. 7.
The
New Zealand Government today welcomed Britain's offer to continue to guarantee sterling reserves for six months after the sterling agreements expire on September 24. The Finance Minister, Mr Wallace Rowling, said New Zealand was concerned that stability should be maintained on foreign exchange markets and was ready to co-operate with Britain to ensure this.
The British offer, announced yesterday, backs the U.S. dollar value of New Zealand's sterling reserves at the sterling-dollar rate of 2.4215/13, a higher guaranteed value than under the existing agreement.
- Reuter.
An urgent
the British message from Chancellor of the Exchequer, Mr Anthony Barber, was waiting for Mr Haddon Cave when the plane landed at Bahrain. An official sealed envelope had been rushed to the tarmac by a British Embassy messenger.
The decision had been brought forward a week because of the terrible drubbing which sterling took on the international money market early this month.
Some cheer for local bankers who feel the London announcement was made on a complete "take it or leave it" basis, came out of last night's Kai Tak news conference.
Mr Haddon Cave indicated that Whitehall is definitely waiting for a formal reply to their proposals and will work towards a new agreement rather than the half-year stay of execution.
"There is no evidence for supposing that this is a fait accompli or an imposition," he said.
"We have not reached a breakdown in the dialogue, it has only just started.”
تسم
But the Financial Secretary disclosed that he had held no monetary discussions with the British Government on this trip - although he would have done so if invited.
And, apart from a short meeting with Bank of England officials, the reserves question was not even raised.
Mr Haddon-Cave said: "You can rest assured that the management and security of our reserves is a subject of the highest priority in Hongkong."
$3
Today he will certainly be closeted in urgent discussions with the Acting Governor, Sir Hugh Norman-Walker. Overtures by the Governor. Sir Murray MacLchose, to the Treasury in London last month did not appear to bear fruit.
Time is running out. The deadline for the expiry of the Basle swap is midnight on September 24.
It is difficult to imagine a man with more headaches than Mr Haddon Cave.
Next week, he has to go to Tokyo for negotiations with the Japanese consortium bidding for the Tube project.
attend the
He is also expected to International Monetary Fund meeting int and may Nairobi, starting on September 24 have to cut that session short to dash to Dar-es- Salaam for the Commonwealth Finance Ministers conference where the question of sterling reserves is sure to be raised.
Hongkong is easily the biggest of the holders, but Australia and New Zealand also have millions of pounds invested in London.
As far as the mass transit system is concerned, it looks as if we will have to contain our patience for many more months before we learn which consortium has won the contract.
In London, the Tube steering group had talks with the British group, the Anglo-French- German consortium and the Italian Intermetro concern. And the Japanese come next week.
Clearly the Government does not intend to spend $ 10,000 million on the project lightly.
Mr Haddon Cave explained that, between now and the end of March, the various consortiums will be fed technical data by the Government seeking to lay down its specifications.
If all but one of the bidders dropped out by carly next summer, the survivor will get the job.
If there is still more than one horse left in the race, the issue would be decided on price, he said.
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