DRAFT LETTER FROM CHIEF SECRETARY
TO SIR JOHN TILNEY MP
78
Thank you for sending to me a copy of the letter from the
Hong Kong Civic Association about the colony's sterling
reserves. We had in fact already seen this in the
Treasury since the Acting Governor forwarded the text
to London by telegram.
As you know, the previous Sterling Agreement with Hong
Kong, as with other official holders, expired on
24 September. During the preceding months we were fully
briefed on the anxiety felt in the colony about future
arrangements through reports from the Governor and visits
to the Treasury by both the Governor and the Financial
Secretary to the colony. There was certainly no failure
of communication on these matters.
In the event, and after the letter from the Civic Association
was written, HMG has offered to guarantee the eligible
sterling holdings of Hong Kong (and other official holders)
This offer was a fair and
in terms of the US dollar for a further period of six
months from 24 September.
reasonable one, made in the general interest of maintaining
the element of stability that the sterling guarantees have
brought to the exchange markets through an acutely
unsettled period. Stability in this sense is plainly a
matter of great concern to Hong Kong, though it would
obviously be unreasonable for Hong Kong and other sterling
holders to expect to enjoy the benefits of such stability