M 9/501/1
Reference......
SECRET
PA
Mr McGinley (Gib & Gen Dept)
93
STERLING AGREEMENTS WITH MINOR DEPENDENT TRIAC Ti
1. Since I wrote to you on 18 and 25 July, further work has been done inter-departmentally on arrangements which might succeed present Sterling Agreements. It seeus likely that they will involve a generally similar structure to the present ones ie that in return for keeping a certain amount of their reserves in sterline. we would guarantee the US dollar value of at least part of the sterling element in their reserves.
It woul?, course, be open to the countries concerned to chose whether to take advantage of our offer or not as they their best interests.
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2. In a recent letter, however, the Bank of England Pow said that they assume that the colonies (excent Pon Bog Kong) "are presumably not to be given the option of or not to adhere" to whatever new amen cements tre proposed. I am sure that we cannot treat Persuda Belize in this way, since they have in the past, Hong Kong, been treated on a par with the independent holders of Sterling Agreements. However, I should I Frateful for the view of you and others to whom thi minute is addressed on how the question should be nu the other smaller dependent territories. In the nort have at least gone through the motions of appearin consult them, even if we would have resisted any diri tion on their part not to take up whatever as he fi offered elsewhere. Would be right in thinking would wish to adopt the same approach this time aroundy I appreciate that you may have some difficulty in ay ing a view in the absence of any indication of rha! that the countries concerned might be offered/have i on them. This has not yet been decided, but T fin! difficult to believe that they could be offered and different from what is offered to the rest; and resili their lack of financial expertise, not to menti or difficulties with communications, etc, would preclu from trying to do better by striking out on thei!.
4.
15 August 1973
Cc:-HIOD
PDTD WIAD
Carib Dept
D I Lewty
Financial Relations ut G 58/G Tel @ 206
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