TNAG-0379-FCO40-425-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 246

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ORWELL

TO ROUTINE COVERNOR HONG KONG TELEGRAM NUMBER 228 OF 5 MARCH. 1973.

YOUR TELEGRAM NO. 159 OF 9 FEBRUARY: STERLING AGREEMENT.

1. THE BANK OF ENGLAND OPENED A SUSPENSE ACCOUNT IN YOUR NAME

TO ENABLE PART PAYMENT OF THE AMOUNT DUE ON IMPLEMENTATION TO BE

EFFECTED. WE ARE NOT CLEAR WHY YOU SHOULD WISH TO HAVE THE KIND OF ARRANGEMENT YOU NOW PROPOSE, SINCE IT WOULD NOT REALLY BE A SUSPENSE ACCOUNT AT ALL. THE SUSPENSE ACCOUNT OPTION WAS ORIGINALLY OFFERED FOR THE BENEFIT OF THOSE COUNTRIES WHO WOULD

FIND IT AWKWARD TO HAVE TO MAKE AN ACTUAL CASH PAYMENT OUT OF

RESERVES TO HMG IN THE EVENT OF A REVERSE PAYMENT BECOMING DUE

UNDER THE TERMS OF OUR PROPOSALS.

2.

MY TELEGRAM NO. 138 ACCORDINGLY MADE CLEAR THAT THAT THE NET .

SUM ON SUCH AN ACCOUNT WOULD NEED TO BE RETAINED FOR SO LONG AS THE

POSSIBILITY REMAINED OF REPAYMENT TO THE UK. UNDER THE ARRANGEMENTS YOU SUGGEST, IF A REVERSE PAYMENT BECAME DUE TO THE UK, ANY SHORTFALL BETWEEN THIS AMOUNT DUE AND THE BALANCE ON YOUR SUSPENSE ACCOUNT WOULD FALL TO BE MADE GOOD BY DIRECT PAYMENT. IF YOU ARE PREPARED TO ACCEPT THIS RISK, WE SHOULD HAVE THOUGHT THAT YOU WOULD FIND IT MORE CONVENIENT TO RECEIVE DIRECT PAYMENTS FROM US IN THE FIRST PLACE, WHICH YOU COULD USE FOR THE PURPOSE DESCRIBED IN YOUR T.U.R., OR ANY OTHER.

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