L 4A
LOWE. BINGHAM & MATTHEWS, HONG KONG
9 -
as a result of an excess of imports from Japan over
exports to Japan during the year, after taking into
account the settlement by S.C.A.P. of his liability
to Hong Kong Government under the old "Two-Way Account"
in January, 1951.
The counterpart of this account which is
maintained for S.C.A.P. by The Hongkong & Shanghai
Banking Corporation in Tokyo disclosed a balance of
US$20,510,452.83 due by Hong Kong Government at 31st
March, 1951. A reconciliation of these balances was
prepared by the Bank detailing how the difference of
US$2,993,776.41 was made up. We were unable to attempt
verification of this reconciliation as the records and
information relative to this account are maintained by
the Bank and not by Supplies Branch.
We would state, however, that at 30th June,
15
1951, the difference between the Tokyo and Hong Kong
versions of this account had been reduced to US$186,832.62,
and the items making up this difference should be respon-
ded to in Tokyo or Hong Kong in due course.
We have been informed and wish to emphasize
that no formal agreement has been executed between S.C.A.P.
and Hong Kong Government regarding the operation of and
terms of settlement of this Open Account and we are ac-
cordingly unable to express an opinion as to whether or
not the Provision for Exchange Loss, commented on here-
under, is either necessary and/or adequate.
Provision for Exchange Loss - $1.194.547.20
The liability to the Supreme Commander Allied
Powers, Japan, is shown on the Balance Sheet converted
to Hong Kong dollars at the rate used for accounting
purposes. 1.0. HK$5.67 - US$1. The cost of settling
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