CPS 150
PORITY
CYPHER/CAT A
FM HONG KONG 110708Z
CONFIDENTIAL
ORWELL
CONFIDENTIAL
REQ
PA
REGI
16 APR 1974
HKK
5/10-
18.1V
LAST
REF.
NEXT
(52)
TO PRIORITY FCO TELNO 422 OF 11 APRIL.
YOUR TELEGRAM NO 357: STERLING GUARANTEE.
REF
THE INTERPRETATION IN YOUR PARA 2 INVOLVES THE OBLIGATION TO MAINTAIN NOT AN MSH AT ALL, BUT AN MSH PLUS REPEAT PLUS A GUESS AT WHAT THE FALL IN THE VALUE OF GILTS OVER A MONTH WILL BE PLUS RPREAT PLUS (AFTER ONE MISCALCULATION) A FURTHER ELEMENT TO GUARD AGAINST QUOTE CIRCUMSTANCES WHICH COULD NOT HAVE BEEN REASONABLY FORESEEN OR PRUDENTLY PROVIDED AGAINST UNQUOTE. WHILE WE FIND NO DIFFICULTY IN UNDERSTANDING THE ATTRACTIONS OF THIS INTERPRETATION
TO THE TREASURY WE CANNOT UNDERSTAND HOW WE COULD HAVE DEDUCED IT
FROM THE COMMUNICATIONS BETWEEN US.
2. TO PURSUE THIS ARGUMENT FURTHER WOULD BE POINTLESS, AND WE SUGGEST THAT THE TREASURY NOW PAYS COMPENSATION AS THEY PROPOSE.
WE NOTE THAT IF WE PARTICIPATE IN THE FURTHER GUARANTEE IT MUST BE
ON THE ABOVE INTERPRETATION.
MACLEHOSE
ORWELL DISTRIBUTION
FRD
HKIOD
CONFIDENTIAL
53