TNAG-0448-FCO40-513-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1974 — Page 227

IMMEDIATE

CYPHER/CAT A

GPS 230

FM FCO 231650Z

.R.

RE:

CONFIDENTIAL

PA

(MF 9/548/1)

CONFIDENTIAL

DESKBY 240180Z

24 JAN1974

HKK 5/10

TO IMMEDIATE TOKYO TELNO 80 OF 23 JANUARY, 1974.

FOLLOWING PERSONAL FOR PHR MARSHALL,

NOF YOUR TELNO 105: STERLING.

LAST

RET

#EXT

38

REF

Stacking

প

2

214.5

1. THANK YOU FOR YOUR TELEGRAM. BARRATT HAS TOLD HADDON-CAVE OF

YOUR MISSION IN A TELEGRAM WHICH IS BEING COPIED TO YOU.

2. THE SUBSTANCE OF PARAS 1 AND 2 OF MY TELNO 75 WAS FOR YOUR

BACKGROUND INFORMATION ONLY, WE NOTE WHAT YOU SAY, BUT THE TREASURY WOULD NOT (NOT) WANT TO PASS ANY OF THIS TO HADDON-CAVE

AT THIS STAGE, THE PRESENT OBJECT IS TO GET AN INDEPENDENT INDICATION

OF HONG KONG'S OWN VIEWS. IF YOU ARE ASKED WHAT PROGRESS HAS BEEN MADE IN ANY SIMILAR INITIATIVE WITH OTHER HOLDERS, THE TREASURY

SUGGEST YOU SIMPLY SAY THAT YOU ARE NOT INFORMED ON THIS.

3. THE TREASURY RATHER DOUBT WHETHER THE OUTCOME OF THE ROME

DISCUSSIONS OR THE FLOATING OF THE FRENCH FRANC WOULD BE VERY RELEVANT FOR HADDON-CAVE'S RESPONSE. THERE IS NOT IN FACT MUCH TO ADD ON EITHER TO WHAT HADDON-CAVE WILL ALREADY HAVE SEEN IN THE

PRESS. BUT GUIDANCE ON THE ROME DISCUSSIONS HAS BEEN SENT TO THE

TOKYO EMBASSY AND THIS COULD BE DRAWN UPON WHEN YOU SEE HADDON-CAVE. SPECIFICALLY ON RESERVE CURRENCY BALANCES, THE PROSPECT FOR A MULTILATERAL SOLUTION (FOR EXAMPLE THROUGH AN SDR SUBSTITUTION FACILITY IN THE IMF) HAS RECEDED EVEN FURTHER INTO THE DISTANCE

AS A RESULT OF THE ROME DICUSSIONS.

4. WE HAVE ONLY TODAY BECOME AWARE THAT FRIDAY IS A PUBLIC HOLIDAY

IN HONG KONG, SO IT MIGHT BE PRUDENT FOR YOU TO TELEPHONE HADDON-CAVE

TO ENSURE THAT HE WILL BE AVAILABLE.

DOUGLAS-HOME

FILES

FRD

HK100

MR WILFORD

COPIES TO:

MR BARRATT HM TREASURY MR FENTON BANK OF ENGLAND

CONFIDENTIAL