Wt. 29446/552 9/46 50m. S. & S. Ltd.
54126/4/46.
159
C. O.
Mr.
Mr.
Mr.
Mr.
Palmer 2014
-JEC 16"
Emanuel 2/12 Jowelhans 6.12
Caine 64 11/
DRAFT.
LETTER.
Permt. U.S. of S.
Parly. U.S. of S.
Secretary of State.
545,
R. Palmer's
D. R. SERPELL, ESQ.,0.B.E.
TREASURY.
(No. 29) a klound
FURTHER ACTION.
Cepiso also cont to
Accenti Mycier Wilson
Dear Serpell,
fr.
Your ref. 5. 52892/04
rz
I enclose a copy of a letter
from the Crown Agents concerning Hong
28 Kong telegram No. 1357 regarding the 28)
proposed loan. The Crown Agents confirm
that they are unlikely to require re-
payment of the J.C.F. advances in the near
future. Any London loan could thus probably
be floated at a time when the best terms
could be obtained for Hong Kong. This is
satisfactory.
2. As regards the local issue of
the loan, the Governor mentions two
points:-
(a) Local firms are unlikely to invest
unless Government state that so far as
can be foreseen there is no reason to
suppose that present exchange rate between
H.K. and sterling will be varied.
The trouble about a declaration
of this kind is that it is liable to be
taken as a pledge never to devalue at
-
least while the loan is outstanding. This
is a pledge which clearly cannot be given.
The difficulty might however be got over
by referring to the fact that the provision
of the Bretton Woods Agreement, under
which the International Monetary Fund has
/been