CO129-590-21 Government funds- temporary provisions 23-12-1941 - 4-12-1942 — Page 30

Minute

10/18/

With reference to preceding minutes, and

#fi

Mr. Caine's minute of the 16th December, it appe

to

5301

that authority was given to the Crown »gents

oredit interest received on behalf of the Hong Kong

Exchange Fund to Hong Kong general revenues, by

Colonial Office official letter of 4th December, 1942

(55 on 54109). It does not emerge from the minutes

on that file that the Treasury were specifically con-

sulted before such authority was given. The authority

itself was given under the provisions of the Hong hong (temporary provisions, Order in Council, 1942,

the original of which is at 49 on 54109. No action

appears to have been taken since to repeal the Order

in Council, but presumably this should be considered

8 soon as possible.

so far as I am awara and can discover, the

Treasury have not in any way been concerned with the

payment of interest into Hong Kong current account,

and in view of the fact that as a result of the

duress note settlements the percentage of cover for

the Hong Kong doller has been reduced to 94: (see

paragraph 3 of 22 hereon), it is clear that, as Mr.

Caine states, there is no justification for con-

tinuance of this wartime arrangement.

I suggest the action necessary is to send

an official letter to the Crown Agents notifying

them that the authority has terminated from a specified

date and that thereafter the ordinary pre-war practice

whereby transactions on behalf of the Exchange Fund

were made under authority given by the Hong Kong

Government, should be resumed.

na regards the date, while it might be

advantageous to go back as far as possible, viz. to

the resumption of civil administration, this would mean withdrawing money that has already been credited to Hong Kong Government funds ind hence increasing

/the Treasury

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