H.K.
financial
although!
I. C. A.
23-12-41
2
We had some further discussion yesterday with r. Goldburg and Mr. Norman Young regarding the
financial assets held by the Crown Agents on behalf of the Hong Kong Government, and in particular on the position as regards the various funds referred to in the last paru raph of Mr. Goldburg's letter of the 23rd December.
The Hong Kong Exchange Fund at present stands apparently at some £16,000,000, of which £4,000,000 are liquid. It looks as though there would be out of this a surplus of £1,500,000 which could be used to liabilities which are still outstanding, although this depends to some extent on the amount of sterling which will have to be paid to the China Stabilisation Board in pursuance of lir. Hall Patch's assurance to the Board that Hong Kong currency paid over to it will be redeemed at its proper sterling value. The discussion also touched on the position as regards the Hong Kong Government's undertaking to pay from the profits of the Fund a sum of £200,000 per year to the Imperial Exchequer, but it was felt at the discussion that at this stage no steps need be taken formally to cancel this comitment.
The Coin Security Fund stands at some £92,000, and the Sinking Fund at some £103,000.
Mr. Norman Young took a careful note of the financial position, and I do not think we need send anything further to the Treasury.
Mr Came.
World
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you
With /umon.
3h 7mm.
31.12.41.
anything to this brief reward
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As regards the Exchange Fund
LAKAAN * 31.12.
I think what we envisaged was not that we should immediately make any use of the capital surplus existing in the fund, but that we might make available the income for the purpose of meeting the recurrent charges. The income at the moment is estimated at about £400,000 per annum, and this may be somewhat reduced by the temporary encashment of Hong Kong bank notes in Chungking, it is probable that it will continue to be ample to cover the running expenses for salaries, pensions, etc., which will have to be met. Whether it can alsó meet the payment of £200,000 per annum to the Exchequer is another matter and personally I think that in current circumstances it would be preferable to suspend that payment. We need not however, take any immediate action because it is not a payment which is made automatically and we can consider in due course whether or not necessary instructions should be given to the Crown Agents for payment to be made.
1.1.42.