CO129-594-5 Financial Policy Directive 21-2-1945 - 6-10-1945 — Page 14

COPY. Original on

54144/44/45

514

1.

(a)

2.

(b)

(c)

MONETARY AND FISCAL GUIDE

HONG KONG

The currency which was legal tender in Hongkong before the Japanese occupation (i.e. notes issued by the Hongkong and Shanghai Banking Corporation, the Chartered Bank of India, Australia and China and the Mercantile Bank of India and notes and subsidiary coin issued by the Hongkong Government) will be re-established as legal tender with the exception of a certain series of Hongkong and Shanghai Bank notes issued under duresse during the occupation and of which particulars are given in the annexure.

Service personnel will be paid either wholly in the new series of notes or wholly in the old.

You will be supplied with new notes of the Bank and Government issues, which will form series distinguishable from the series in circulation before the occupation, but it is not intended to discriminate between the old and the new issues which should be accepted at parity with each other.

The bank notes issued under duresse are in a special position; until more is learnt about the circumstances of their issue no final decision can be taken as to their status. Meanwhile you should issue a notice offering to accept them for holders on deposit for safe keeping without commitment as to any value to be given for them at a later date.

(a) The legal tender status of Japanese currency will be

terminated immediately and no Japanese issue of any kind should be accepted by the administration.

(e)

No legal tender status should be accorded to Chinese or other non- Hongkong currencies and they should not be accepted by the administration.

You should prohinit all exports and imports of currency other than Hong Kong and Chinese National currency except under licence.

3.

Upon re-occupation Hong Kong automatically resumes its position within the sterling area. Property held in the United Kingdom on behalf of persons resident in or carrying on business in Hong Kong remains subject to trading with the enemy regulations, but as soon as possible steps will be taken in London to lift the restric- tions.

4.

You will immediately:-

(a) (i)

(b)

(ii)

Close all Banks, Treasuries, Financial Institutions including P.0. Savings Banks, vaults and safe deposit boxes and take all steps possible to safeguard valuables, records and premises.

Declare a general moratorium on pre-re-occupation debts.

As soon as possible you will scrutinize the accounts and open the vaults and boxes covered by (a) with a view to:-

(i) Impounding the assets of Enemy Agencies.

(ii)

Blocking for scrutiny and where appropriate, e.g. in the case of these resident in enemy territory, handing

to