S J G Cambridge Esq
Foreign & Commonwealth Office
Great George Street
London SW1
Dear Cambridge
HONG KONG
RECEIVED IN REORY No. 51
2 5 MAR 1974
HKK STIQ
BREACHES OF STERLING DECLARATION
Treasury Chambers Parliament Street
London SW1P 3AG
Telephone 01-930 1234 ext
22 March 1974
Discussed and Superceded
Ass
22/2
Attached is a redraft of the suggested telegram to Hong Kong which I have prepared following our discussions with the FCO on 21 March.
2. We should be grateful for your views in the course of the day.
3. We should recognise that the formula suggested which limits the eligibility for Hong Kong to guarantee could still lead to a situation, if Hong Kong's reserves fall during March, where Hong Kong will receive the full implementation payment to which she would have been entitled if she had adhered strictly to the terms of the Declaration. In other words in a situation of falling reserves, the formula may impose no penalty on Hong Kong whatsoever despite the various breaches.
4. I am sending copies to Payton, Stuart. Miss Pestell and Aust.
Yours sincerely
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