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DD HONG KONG 110100Z
i GRS 208
SECRET
DESKBY 110100Z
FM FCO 101700Z OCT 83
TO IMMEDIATE HONG KONG
TELEGRAM NUMBER 1027 OF 10 OCTOBER
FOLLOWING PERSONAL FOR GOVERNOR FROM CLIFT
PROPOSED FINANCIAL MEASURES
1. IN ORDER TO HELP US IN ADVISING MINISTERS ON THE IMPLICATIONS
OF THE FINANCIAL MEASURES WHICH YOU WILL BE PROPOSING TO EXCO, WE SHOULD FIND IT HELPFUL TO RECEIVE BY TELEGRAM (DESKBY 110830Z) THE OPERATIVE PART OF THE MEMORANDUM BEING PREPARED FOR
EXCO.
2. AS WE UNDERSTAND IT, A CENTRAL ELEMENT OF THE PROPOSALS IS THAT IN FUTURE BANKS WILL, WHEN ISSUING NEW BANK NOTES, BE REQUIRE TO DEPOSIT WITH THE EXCHANGE FUND THE EQUIVALENT IN US DOLLARS
AS OPPOSED TO HONG KONG DOLLARS. WE SHOULD BE GRATEFUL FOR
CONFIRMATION THAT IN THE VIEW OF YOUR LEGAL ADVISERS IT WOULD BE
IN ACCORDANCE WITH ARTICLE 4 AND THE SCHEDULE TO THE EXCHANGE
FUND ORDINANCE FOR THIS FORM OF PAYMENT TO BE REQUIRED IN
EXCHANGE FOR CERTIFICATES OF INDEBTEDNESS.
3. YOU WILL APPRECIATE THAT IF, IN CERTAIN CIRCUMSTANCES, WE ARE
TO ASK THE SECRETARY OF STATE TO GIVE HIS POLITICAL BACKING TO
SUCH A MEASURE WE NEED TO BE CERTAIN THAT THERE IS NO POLITICAL
LEGAL LOOPHOLE WHICH CRITICS MIGHT EXPLOIT.
4. I HAVE TRIED TO CONSULT THOMAS BUT HAVEDNOT BEEN ABLE TO REACH
HIM.
HOWE
NNNN
DISTRIBUTION
LIMITED
HD/HKD
SIR I SINCLAIR
MR BURROWS, LEGAL ADVISERS
1
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