CO129-607-2 Military administration- accounts- etc. 3-2-1949 - 14-11-1949 — Page 23

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The Church House,

Great Smith Street,

London, S.W.1. 23 23-d March, 1949.

I enclose a copy of a letter dated 23rd February, 1949, eddressed tɔ Kelvin-Stark by Wagstaff of the War Office, about Hong Kong currency notes to the value of HK 4,012,319.70 which were uncovered in the Yokohama Specie Bank and put into circulation in Hong Kong in September, 1945, by the British Military Administration. I also attach copies of previous related correspondence.

As you will see, until the receipt of Wagstaff's recent letter, the position seemed to be that these Hong Kong currency notes were a Japanese external asset which had been taken over by the British Military Administration in Hong Kong and that responsibility rested with the war Office for placing an equivalent eum in cuspense pending a decision as to the disposal of such assets. The only point at 18que apparently was whether this sum should be retained in a war Office suspense account or whether it should be paid over to the Hong Kong Government for custody.

In Wagstaff's letter of 23rd February, 1949, however, the proposition is put forward that in some way the Hong Kong Government have had the equivalent of the value of these currency notes and that it is therefore the responsibility of the Hong Kong

C.G.3. FOLLOWS, BIA., C.M.G.

FINANCIAL SECRETARY,

HỒNG KÔNG

/Government