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Reproduction copy no. L
21st January, 1969
OPDO( DR )( 69 )1
When I talked to your colleague,Lloyd-Jones, yesterday he suggested that I should give the comments which we have on this side of the Treasury on this paper to Phillip Nicholls for passing on to you in due course. I have since, however, spoken to Nicholls and agreed with him that it would be better if I were to put our comments in writing direct to you.
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2. With the exception of one suggested amendment on clause 8 our suggestions are all primarily of a drafting nature and are as follows:-
Clayco 7 penultimate line: delete the words "comparatively modest" since by including these words it might be assured that the profits and dividends were comparatively modest in relation to the direct investment figure of about £80 million.
Clause 8: We would like this amended to read as follows: "Hong Kong is a member of the Sterling Area and keeps its reserves in sterling. Its sterling balances are very large of the order of £350 million. It is in our interest that Hong Kong's reserves ould continue to be held in sterling and for the years imediately ahead this has been ensured in the sterling agreeme: t. In view, however, of Hong Kong's special position as trading and entrepot centre special arrangements permitting a free market in U.8. dollars have been made. Hong Kong's adverse balance of visible trade
Clause 77: We should like the last sentence to read as follows: "If we could not make use of this card then we should be reduced to such economic counters as continuing to give access to Hong Kong products in our own markets (which take only 17 per cent of all exports) and the use of Hong Kong assets held in London (not all of which could be handed over anyway)."
Clause 91(a): delste "retain" and insert "see maintained"
J.C.. Bushell, Esq.,
Cabinet office,
Whitehall,
LONDO", S.3.1.
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/Clause 91(c)
RECEIVED IN ARCHIVES No.31
27 JAN 1969
457
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