TNAG-2016-FCO40-2871-Relations-between-Hong-Kong-and-Japan-1990 — Page 37

CODE 18-77

Reference

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From: M E Cowin

الله

Far East Section Research & Analysis Dept ОАВ 2/126 210 6217

Date: 18 October 1990

Mr Cummins FED

JAPAN: OCCUPATION CURRENCY IN HONG KONG

1.

We spoke. The following information comes from "History of the Second World War: British Military Administration in the Far East 1943-46", by F.S.V. Donnison. This is an official history published by HMSO in 1956 and it is, therefore, authoritative.

2.

The question of Japanese occupation currency was considered when decisions were being made about the re-establishment of British administration in Japanese-occupied territories in South-East Asia and the Far East. It was decided that no value whatever should be given to Japanese currency or to any local currencies introduced under the lapenese regime,

*** re-occupation by Allied forces.

3. The reasons for this were that

following

1. Giving any value to Japanese currency would expose British currency to heavy inflationary pressures as very large amounts of currency had been put into circulation by the Japanese. If the currency was recognised and the re-occupation was gradual, the Japanese would be able to pump still more money into circulation to increase these inflationary pressures. The Japanese might also have used their own money to encourage fifth column activity in re-occupied areas.

2.

Non-recognition would discredit Japanese currency, even areas still occupied by the Japanese as doubts arose about how long Japan would be able to maintain its control.

in

3.

Large accumulations of this currency would mainly be a result of either profiteering or collaboration.

The poorer inhabitants, as their turnover of cash was rapid, would be unlikely to hold much.

policy was accepted and enforced, in most places, with little difficulty.

The

4.

There

were problems in Indonesia because of the strength of the nationalist movement there. The de facto government of the Indonesian Republic declared Dutch currency illegal and made possession of it punishable by death. This led to

continued

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