TNAG-0381-FCO40-427-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 288

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forward contracts for delivery after 24th September. This was the only prudent course open to them, given our continuing inability to tell them anything.

Meeting of 10th (Treasury Note)

paras 13 - 17

para. 18

I doubt whether these paragraphs bring out the differences between our two positions: for instance, I just do not accept that a run-down of our reserves from "excessive" (whatever that means) levels as a result of a balance of payments deficit is one thing; a with- drawal of part of the 0.S.R. component from our T.O.E.R. and switching it into other assets is another.

And I do not understand the last sentence of paragraph 13.

Our "controls" over the banking system are quite adequate (and more formalised than in the U.K.). And to describe the "issue of Government paper"

as "reform of the monetary system" is open to argument.

Meeting of 10th (your note)

para. 4(i)

Haddon-Cave/Bell

facility

A much more accurate version is in paragraph 5(a) of the Treasury note! I received Mrs. Hedley-Miller's letter. Practically speaking, it was all right but I did not acknowledge it.

Dent sinuing.

Скама са

(C.P. Haddon-Cave)

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