CO129-549-1 Remittance of funds between Hong Kong and London 12-2-1934 - 14-2-1935 — Page 19

18

Mr. Vernon.

I have seen Mr. Young and shown him Mr.

Palmer's minute of the 31st January. He feels sure

that the bank is making a considerable profit on the se

transactions, but he does not see that we can advance

much further without ascertaining the facts. He quite

agrees with the action suggested at X of my minute of

the 1st February, and would be glad if we would write

to Hong Kong.

He pointed out that on one occasion someone

in the House got up and asked the Financial Secretary

whether it was a fact that the Shanghai consular fees,

etc. were being remitted home whilst the Army were

requiring dollars to pay their troops. The Financial

Secretary replied that he would make enquiries, and

found that such was the case, and arrangements were

then made with the Foreign Office for their funds to

be available locally for the use of the War Office.

He thinks it would be very awkward if a similar

question were asked in regard to Hong Kong, but, of

course, in the former case one pocket was involved;

in Hong Kong there are the two pockets of His Majesty's

Government and the Hong Kong Government. He said that

the Treasury would be prepared to consider something

more favourable for Hong Kong than in (iii) of No. 4,

but that was a matter which could be settled later.

I submit draft letter to Sir Pethur JAST

you South

accordingly.

festoward yo

2 Think

that

in sufficiently

On Young

& has been

couscound

by

9

that the facts &

arguments of the

Treamen & K.