SECRET
depth of the Treasury belief that in the last resort Hong
Kong is bound to do what we tell them. An agreed arrangement
is a valuable safeguard against constitutional pressure.
Moreover, if, as he says, Hong Kong would act responsibly and
not get out of sterling when it was under pressure, then a
guarantee could be a valuable safeguard by cushioning Hong
Kong against losses. It would not be responsible to throw
this safeguard away wantonly.
30 October 1973
SECRET
Aest
A C Stuart
Hong Kong & Indian Ocean Department