GRS 233A
PRIORITY
EN CLAIR
FM FCO 121430Z
·RECEIVED I REGISTRY
17 DEC 3
(MF/9/393/1)
I
PA
UNCLASSIFIED
73
TO PRIORITY GOVERNOR HONG KONG TELMO 1273 OF 12 DEC/INFO!BTC HONG
KONG
MIPT
THIS DECISION MUST BE SEEN AGAINST THE RECENT DISCONTENT IN HONG KONG, PARTICULARLY AS A RESULT OF THE DILATORINESS OF THE TREASURY IN OFFERING HONG KONG A NEW DEAL GUARANTEEING ITS HUGE LONDON-HELD RESERVES AT PRESENT AGAINST FURTHER STERLING DEVALUATIONS OR, ALTERNATIVELY, TO ALLOW HONG KONG TO DIVERSIFY ITS RESERVES.
14
IT IS FELT LOCALLY THAT BRITAIN TREATED HONG KONG'S REPEATED REQUESTS FOR A RENEWED AGREEMENT THE LAST GUARANTEE LAPSED IN SEPTEMBER WITH STUDIED OFF-HANDEDNESS. THERE WAS ALSO ANGER AT THE TREATMENT AFFORDED TO HONG KONG'S FINANCIAL SECRETARY, MR PHILIP HADDON-CAVE, AT THE WORLD BANK MEETING IN NAIROBI EARLIER THIS YEAR. MR HADDON-CAVE, THE REPRESENTATIVE OF THE LARGEST SINGLE HOLDER OF BRITAIN'S GOLD AND DOLLAR RESERVES, WAS SEATED THREE ROWS BACK IN THE U.K. DELEGATION.
THE FAILURE TO OBTAIN SATISFACTION IN ITS QUEST FOR SOME BASIC PROTECTION FOR ITS LONDON RESERVES UNDOUBTEDLY TRIGGERED OFF RESENTMENT WITHIN THE COLONY'S GOVERNMENT AND BANKING ESTABLISHMENTS. THIS HELPED CREATE A MOOD OF INDEPENDENCE WHICH TODAY'S DECISION REFLECTS.
DOUGLAS-HOME
FILES
FRD
HRIOD
MR MARSHALL MR WILFORD
NEWS
PS/MR ROYLE SIR D WATSON
20
COPIES
то
MR DA WALKER TREASURY
MR SI PAYTON BANK OF ENGLAND
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