Mr Marshall
Сс
Sir Duncan Watson FRED
HKIOD-
STERLING AGREEMENTS
SECRET
RECEIVED IN
REGISTRY No.51
3 SEP 1973
LA
た
Mr Capfellow
he
HKK 5/
Zee 126
121
4/9
126 for reply
1. When I saw Mr Haddon Cave on 3 September he remarked on the news report of the Chancellor's visit to Chequers to see the Prime Minister and speculated on whether the question of the agreements might have been discussed, as well as building society interest. I said that I did not know, but that it might be a while before he knew HMG's decision. Mr Haddon Cave spoke in predictable terms about Hong Kong's expectations repeating what had been said at the meeting with Treasury officials about solutions acceptable to Hong Kong. I get the impression that a straight extension even with the current value of sterling guaranteed may be unacceptable unless it contains provision also for a lower MSP for Hong Kong. Is it possible that this could be achieved administratively by the Treasury authorising continued diversification out of sterling (which we know Hong Kong has great difficulty in doing) by an agreed monthly amount? This might make all the difference. Could you pursue this urgently with the Treasury.
2.
I said that it was a pity that Mr Haddon Cave would not be in London next week when the Governor was having his talks with HMG. He said that he would be back in Hong Kong on 7 September and leave again on the evening of 12 September for Japan on mass transit business. He hoped that HMG's answer on the Agreements would be made known while he was still in Hong Kong. He could forgo his journey to Tokyo, but would prefer not to prejudice the MTR negotiations by not himself leading the team. I said that I would see that those concerned in the Treasury and elsewhere knew his plans. If he could not be made aware of HMG's decision before he left London (which he realised was unlikely) he would like to know while he was in Hong Kong.
4 September 1973
SECRET
M
K M Wilford
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