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procedure and would in the long run almost certainly
result in a loss which could have been avoided.
The present circumstances place a con-
siderable responsibility on the financial
authorities in Hong Kong.
They have no margin to
play with, and if they can assure their budgetary
position by insuring themselves against a fall in
the exchange, one can quite understand that there
would be a good deal of impatience against any
ruling that it would be an improper thing to do;
and as to its being unwise, some of the Unofficial
Members might well consider that their views were
entitled to as much respect in that matter as
anyone else's.
X
In these circumstances, I am doubtful
whether the 0.A.G. should be authorized to say that
the Secretary of State would not sanction such a
course. The Governor in 1933 specially asked for
discretion to insure the provision of sterling to
meet impending Government liabilities and this was
given to him in terms which in no way called for a
limitation of the Colonial Government's practice as
explained above. I should have thought that the
Finance Committee, i.e. the Unofficials, could have
been satisfied by an assurance that the Colonial
Government would not hesitate to use its discretion-
ary powers to the limit in order to insure the
budgetary position, and that the Finance Committee
would not in those circumstances press any project
for committing the Colony to take a view now over
the whole year. We might, however, go so far as
to tell the 0.A.G. that the Secretary of State
would need to be convinced that the threat to the
financial stability of Hong Kong from the exchange
prospects
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