RECEIVED IN
REGISTRY No. 51 14 MAY-1974
Hik 5/10
CONFIDENTIAL
Miss Pestell
LAGT
REF.
NEXT
REF
STERLING GUARANTEE: HONG KONG
1.
(62)
Spoken Mis Pestil
PIA
After we had received a copy of Mr St Clas minute of 3 May and the draft telegram to Hong Kong attached to it, I spoke to Mr St Clair to suggest various ways in which I thought the draft could be improved.
2. In brief these were:
(a) We ought not to fail to react at all to the
deplorable way in which Mr Haddon-Cave presented our case to EXCO, leaving EXCO really no alternative to forming a poor view of our position.
(b) The reference, to participants having had an opportunity to comment might be dropped, since we invited comments on substantive matters and also because at the time neither we nor Hong Kong had any inkling that the interpretation of the accidental breaches provision was in dispute between us.
(c) The reference in the draft telegram to the
balance between the interests of the UK and those of the participants might be supple- mented by a reference to the need for equity as between the different participants.
(d) The draft telegram should repeat that the
present accidental breaches provision still presents Hong Kong with a safeguard against purely accidental breaches.
(e) The reference to it being the responsibility
of the participant governments to take necessary action to adhere to MSH/MSP might be supplemented by a reference to the need for Hong Kong to give the necessary instructions to its agents, since Mr Haddon-Cave's memorandum to EXCO claimed that the discretion they had was one of the reasons why Hong Kong should not know until too late whether or not they were in breach at the end of any particular month.
I understand that Mr St Clair submitted a redraft of the telegram incorporating these points except (a).
3.
4. However, Mr Walker has now produced another draft, which Mr Jones brought down to me today and asked for FCO non-legal views by the middle of Monday, 13 May. I attach a copy of it. Mr Aust is away today, but I suggested that the sentence in manuscript might better refer to our intentions rather than to what the present accidental breaches provision actually says, and be reworded as follows:-
CONFIDENMTAT
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