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5. THIS SEEMED TO US A FAIR AND REASONABLE DEFINITION. IT IMPLIED
THAT WHERE THERE WAS NO DELIBERATE REDUCTION IN STERLING HOLDINGS
BUT THE QUOTE BREACH UNQUOTE WAS PURELY TECHNICAL, ARISING FROM A FALL IN MARKET PRICES, WE SHOULD NOT BE PENALISED. THE FIRST WE HEARD OF ANY OTHER INTERPRETATION WAS IN TELEGRAM FROM THE BANK
OF ENGLAND ON 18 MARCH AND IT WAS NOT UNTIL 10 APRIL THIS YEAR,
AFTER THE END OF THE PERIOD FOR WHICH THAT GUARANTEE WAS GIVEN
YOU ADDED, IN YOUR TELEGRAM 357, A DEFINITION OF AN ACCIDENTAL
BREACH AS ONE RESULTING FROM CIRCUMSTANCES WHICH COULD NOT HAVE BEEN
REASONABLY FORESEEN OR PRUDENTLY PROVIDED AGAINST, SUCH AS A SUBSTANTIAL FALL IN GILT PRICES IN THE LAST DAYS OF THE MONTH
REPEAT IN THE LAST DAYS OF THE MONTH. IT SEEMED TO US THEN AND
ITHSTILL DOES UNREASONABLE THAT YOU SHOULD THUS ALTER THE TERMS
OF THE GUARANTEE AFTER THE CLOSE OF THE PERIOD TO WHICH IT
RELATED. IN YOUR TELEGRAM UNDER REFERENCE YOU PROPOSE TO DEFINE QUOTE ACCIDENTAL UNQUOTE STILL MORE CLOSELY WITH THE PHRASE
QUOTE SAY, THE LAST TWO OR THREE DAYS OF THE MONTH UNQUOTE.
6. AS WE SAID IN PARAGRAPH 4 OF OUR TELEGRAM 1317 OF 17 NOVEMBER
1973 WE ARE. UNABLE TO KEEP DAILY TRACK OF THE CONTENT AND VALUE OF OUR OVERSEAS INVESTMENTS, IT IS AT THE VERY LEAST TEN DAYS AFTER THE EVENT, AND MORE USUALLY UP TO A MONTH, BEFORE WE ARE ABLE TO CALCULATE OUR MSP/MSH. IT WAS ONLY ON 21 MAY, FOR EXAMPLE, THAT WE RECEIVED FROM LONDON ALL THE INFORMATION NECESSARY TO MAKE THE CALCULATION FOR THE END OF APRIL. SINCE WE DO NOT KNOW WHETHER OR NOT WE ARE IN BREACH UNTIL THIS CALCULATION HAS BEEN MADE, THEN, IF WE HAVE NOT ACTUALLY SOLD ANY STERLING, IT IS SURELY FAIR TO SAY THAT THE BREACH IS ACCIDENTAL.
7. WE HAVE CONSIDERED WHETHER WE COULD TRY TO QUOTE REASONABLY
FORESEE OR PRUDENTLY PROVIDE AGAINST UNQUOTE CIRCUMSTANCES UP TO
ABOUT A WEEK BEFORE THE END OF EACH MONTH BY TAKING ACCOUNT OF
MOVEMENTS IN FINANCIAL TIMES STOCK INDICES AND THE LIKE (THE FINANCIAL TIMES CAN TAKE UP TO A WEEK TO ARRIVE HERE). BUT AN
ATTEMPT TO USE THESE INDICES AS THE BASIS FOR TOPPING UP WITH A
GENEROUS OVER-ALLOWANCE IN MARCH ONLY JUST SCRAPED US PAST MSP IN
THE EVENT.
8. QUR DIFFICULTY IN PUTTING THIS TO EXCO IS THATT IT APPEARS THAT
YOU ARE INSISTING ON A DEFINITION OF QUOTE ACCIDENTAL BREACH UNQUOTE
THAT MAKES IT IMPOSSIBLE FOR US TO BE SURE THAT WE CAN AVOID A
BREACH: AND THAT SEEMS UNNECESSARY TO FULFIL THE PURPOSE FOR WHICH
THE GUARANTEE IS DESIGNED, FROM YOUR OWN POINT OF VIEW. 9. WE THINK
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