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OUTWARD TELEGRAM
152
[This Document is the Property of His Britannic Majesty's Government, and should be
kept under Lock and Key 1 under Less que Leve FILE
DEPARTMENTAL NO. 2.
Cypher telegram to Sir A. Clark Kerr, (Chungking).
Foreign Office, 25th December, 1940.
5.50 a.m.
f
No. 338.
mmmmmmmmmmmmmmmm
Chinese Ambassador has given us substance of a telegram from Dr. H. H. Kung on "proposed Chinese exchange control". This contemplates action by (a) Chinese Government, (b) Chinese banks, (c) foreign banks, as follows:-
(A).
Strict examination and control of applica- tions for foreign exchange, with special precautions (i) against enemy and puppet régime obtaining foreign exchange, (ii) against speculators. Besides budgetary economy (said to be achieved) restriction of note issue, and strengthening of reserves.
(B). To attempt to increase holdings of foreign exchange, to absorb remittances, and to maintain current rate steady. Encouragement of savings, absorption of idle money, and restriction of credit.
(C). To consent to stop forward and change-over transactions.
Repeated to Hong Kong for Hall Patch and Rogers, No. 804.
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