CO129-605-4 Government loans 12-7-1946 - 6-1-1948 — Page 63

C.O.

REGISTERED No.

DRAFT AND RECORD COPY

LETTER

54126/4/47 SENT

Copy

Colonial Office,

Church House,

64

65

Great Smith Street,

DATE

12th September, 1947.

DRAFT

Dear Young,

M.

Mayle

MR.

MR.

ENCLOSURES

copy of original paragraph of draft telegram.

tozo

FURTHER ACTION

IMMEDIATE

Proposed Hong Kong Loan

Following his discussion with you Caine has

su gested the following revised version of paragraph 4 of our draft telegram to the Governor of Hong Kong, which I handed to Sarpell for Treasury Comments last Friday:-

*4. Suggestion in your telegram No.1152 for borrowing from Exchange Fund has been very carefully considered in light of paragraphs 2 and 3 of your telegram. In present circumstances, however, any recourse to the Exchange Fund, which could only mean a reduction in the sterling securities which the Fund would otherwise hold, would have precisely the same effect on general sterling position as direct borrowing in the London market. I am satisfied therefore that it would be undesirable to pursue this proposal at present.

I enclose the text of the original paragraph 4, for

ferance purposes,

Would you very kindly let me know whether you agree with the revised draft?

N.E. YOUNG, E32., C.M.G., M.C.

To

Yours sincerely,

Sosd. (N. I. Maylo)

[4264A] Wt. 11439/415 50m. 5/45 C.N.Ld. 748