ORIGINAL
ON
16102/39 ECON
Cypher telegram from the Governor of Hong Kong to the
Secretary of State for the Colonies.
13
139
Dated 2.10.39.
Received 10.50 a.m. 2nd October 1989,
No. 325 Secret.
76102/39
Econ
12
*
Your circular telegram No. 52 Secret and my
telegram No. 324 confidential.
7061/15/39
Control of imports and exports,
Paragraph 1.
Principle was agreed in your telegram No. 195 Secret that entrepot trade benefits sterling and should therefore not
be hampered, It follows that absolute prohibition of
imports falling within classes (1) and (2) of paragraph 4
of your circular telegram or restrictions to sterling
countries of imports under classes (3) and (4) are
undesirable, Following conclusions and proposals are
submitted on those assumptions,
(1) Fundamental object is to prevent utilization of
money resources for non-sterling purchases, except wi`k
Government approval. This can be achieved most simply
by diverting actual resources into Government hands.
Income tax proposals therefore represent probably the
greatest step this Government can take.
?
(2) Direct control over imports from non-sterling
countries can. it is thought, be effected by licensing
system in the case of certain selected commodities.
Licences for non-sterling imports would normally only be
issued on importer's guarantee that he would sell only
for re-export and the scheme would be confined to goods
whose nature renders enforcement of such guarantee easy.
I propose if you approve to enact legislation providing
for