CO129-607-2 Military administration- accounts- etc. 3-2-1949 - 14-11-1949 — Page 25

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THE WAR OFFICE,

WHITEHALL, S.W.1.

23rd February, 1949.

2

16/Abroad/2505(F.5.)

Dear Kelvin Stark,

1. Will you kindly refer to your letter to Hampson of 22nd March, 1948, reference 19261/63/33/48, about

the Hong Kong currency notes to the value of 84,012,319.70 uncovered in the Yokohama Specie Bank.

2.

When the notes were put into circulation in Hong Kong, we made in War Office books the bookkeeping adjustments of debiting the British Military Administration Hong Kong with the sterling equivalent of £250,769:198:8d. and crediting the amount to Liquidator Yokohama Bank Suspense Account. This was done on the assumption that the currency would be brought to account in the cash accounts of the British Military Administration of Hong Kong. In fact, we told B.M.A. Hong Kong, by telegram No.88217 of 6th December, 1945, of our proposal to make such adjustment, and received their confirmation (Hong Kong telegram, C.A. 2031 of 14th February, 1946,) that the accounting was agreed, on the assumption that no actual payment would be made by us to the liquidator at that stage. Since then, the matter of the disposal of the sterling sum placed in suspense has been dormant pending a decision regarding the disposal of currencies found in Japanese hands generally, (see Hampson's letter of 23rd April, 1948, No. 0.F.63/22/23).

3.

It now transpires from a recent reconciliation of War Office books with the cash accounts of the British Military Administration of Hong Kong, that the currency in question was not in fact brought to account by Hong Kong and that a discrepancy of £250,769:198:8d. exists between war Office books and the B.M.A. cash accounts.

4.. It would appear therefore that Hong Kong's note circulation has been increased by £4,012,319.70 without

D. Kelvin Stark, Esq.,

Colonial Office,

S.W.1.

/any