I would suggest to my honourable Friend that the foreign investor is at least as discouraged by high national debt for that, as all example shows, is… - John James Cowperthwaite

I have three objections to my honourable Friend’s wider proposal that exchange control powers be used to require the fixing of exchange by merchants on entering into both export and import contracts. The first is that I think it excessively paternalistic to require a merchant to protect himself against a risk he is prepared to take. Secondly, I think it wrong to impose a condition which is likely to cause one group of merchants a loss, for the purpose of providing the other group with protection at no cost to them. Thirdly, I do not think it is in fact practicable to enforce such a system. I am sorry to be so negative, but I am sure that the solution to my honourable Friend’s problem should not depend on compulsion but on the provision of voluntary protection on insurance principles.

I myself have no doubt in the past tended to appear to many to be more concerned with the creation of wealth than with its distribution. I must confess that there is a degree of truth in this, but to the extent that it is true, it has been because of my conviction that the rapid growth of the economy, and the pressure that comes with it on demand for labour, both produces a rapid and substantial redistribution of income directly of itself and also makes it possible to assist more generously those who are not, from misfortune temporary or permanent, sharing in the general advance. The history of our last fifteen years or so demonstrates this conclusively.

We enjoy a considerable net inflow of capital and I am sure that a condition of its coming, and staying, is that it is free to flow out again. It is also important for Hong Kong's status as a financial centre that there should be a maximum freedom of capital movement both in and out.