PRIORITY
GRS 180
EN CLAIR
FM BTC 2409402 HONG KONG
UNCLASSIFIED
26
ккк
OR WELL
TO PRIORITY FCO TEL 126 OF 24 SEPT. 1973
STERLING,
PA
161
24. Tx
UNEXPECTED RETURN OF HADDON-CAVE TODAY WITHOUT ATTENDING IN F
MEETING HAS PROMPTED PRESS SPECULATION THAT, DESPITE DENIALS REPORTED
IN MY BTC 123, SOME FORM OF UNDERSTANDING HAS BEEN REACHED OVER
HONG KONG RESERVES AND WILL BE ANNOUNCED SOON.
HADDON-CAVE, INTERVIEWED ON ARRIVAL, IS REPORTED AS SAYING THAT
HONG KONG CLEARLY HAS AN INTEREST IN STABILITY OF STERLING AND THAT
ANY SWIFT TRANSFER OF SIGNIFICANT PORTION OF RESERVES OUT OF STERLING
COULD HAVE DISTURBING EFFECTS ON WORLD MONEY MARKETS.
HE DENIED THAT THERE WAS ANY
DRAMATIC SIGNIFICANCE'* IN HIS
RETURN. HE WANTED TO BE NEARER THE FILES SO AS TO ASSESS MY
UNDERSTANDING OF THE BRITISH GOVERNMENTS ARRANGEMENTS TO CONTINUE
THE GUARANTEE'', THERE WAS NO QUESTION OF EITHER ACCEPTANCE OR
REJECTION OF THE BRITISH GOVERNMENT'S OFFER AT THIS STAGE: HIS
IMMEDIATE TASK WAS TO PREPARE A SUBMISSION TO THE GOVERNOR IN
COUNCIL BALANCING THE BENEFITS AND OBLIGATIONS AND INCLUDING THE
POSSIBILITY THAT WE MIGHT IMPOSE SOME OF THESE OBLIGATIONS ON
OURSELVES IN THE INTEREST OF GENERAL STABILITY''.
ASTON.
ORWELL DISTRIBUTION
FRD
HKI OD