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9. WE THINK IT IS FAIR TO ASK YOU TO STICK TO YOUR OWN DEFINITION
OF AN QUOTE ACCIDENTAL FAILURE UNQUOTE IN PARAGRAPH 2 OF YOUR
TELEGRAM 1209 OF 26 NOVEMBER 1973 BOTH FOR THE OLD GUARANTEE AND FOR
THE NEW ONE, 1.E. A QUOTE FAILURE UNQUOTE THAT RESULTS FROM A
CHANGE IN THE VALUE OF HOLDINGS ARISING FROM CHANGES IN MARKET
PRICES, ON WHATEVER DAY IN THE MONTH THESE MAY OCCUR, THIS WOULD
EXCLUDE SUCH FAILURES ARISING FROM THE SALE OF SECURITIES DURING
THE MONTH IN QUESTION, AND WOULD THUS, IT SEEMS TO US, BE IN ACCORDANCE WITH THE BASIC PURPOSE OF THE GUARANTEE.
10. AT THIS DISTANCE A DEFINITION THAT ALLOWED ONLY FOR QUOTE A SUBSTANTIAL FALL IN GILTS IN THE LAST TWO OR THREE DAYS OF THE MONTH
UNQUOTE WOULD MAKE IT IMPOSSIBLE FOR US TO BE SURE OF QUALIFYING
FOR THE GUARANTEE, UNLESS WE WERE PREPARED TO BUY LARGE QUANTITIES
OF STERLING SECURITIES TO PROVIDE US WITH A SUBSTANTIAL MARGIN AND EVEN THEN WE MIGHT GET IT WRONG.
11. BUT THIS WOULD SURELY GO WELL BEYOND THE BASIC PURPOSE OF THE
GUARANTEE WHICH IS SURELY TO PREVENT THE STERLING EXCHANGE RATE
BEING DEPRESSED BY ACTUAL SALES OF STERLING.
12. IN SHORT - WITH REFERENCE TO YOUR PARAGRAPH 4 WE ARE SEEKING
NOT SO MUCH A REFORMULATION OF THE PROVISION IN PARAGRAPH 3(2)
· OF THE DECLARATION AS A RETURN TO THE ORIGINAL GLOSS ON IT IN
PARAGRAPH 2 OF YOUR TELEGRAM NO 1299 OF 26 NOVEMBER 1973.
MACLEHOSE
ORWELL DISTRIBUTION
FRD
HKIOD
3
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