TNAG-0380-FCO40-426-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 170

HONG KONG: STERLING AGREEMENTS

1. The Sterling Agreement with Hong Kong expires (in

common with those of the other 56 signatories) on

24 September.

The Chancellor sent an interim personal

message on 31 July to the Governor (and on similar

lines to all the signatory Governments).

2. It has not been possible to say anything positive

1

to any of the Agreement holders although it has been

emphasised to the Governor that it should not be

assumed that no arrangements will be made in relation

to official Sterling balances after 24 September.

3. May I emphasise that the contents of the

Chancellor's message have not yet been settled and

any press comments, even if they claim to delve from

authoritative sources, are pure conjecture.

4.

In the absence of the Chancellor, the Governor

saw the Minister of State to the Treasury, Mr John Nott

(the Minister in Charge) and Mr Mitchell, the Second

Permanent Secretary at the Treasury on Thursday

afternoon, 9 August. At this meeting both sides

explained their respective positions.

5.

Subsequently, Mr Haddon-Cave, Mr Blye and

Mr Patterson had discussions with senior Treasury and

Bank officials on 10 August. In the absence of any

information on the position following 24 September

the discussion centred on what alternatives the

Hong Kong Government would prefer to see.

SECRET

16.