Second, the provision in our telno. 314 that
we would not compensate in respect of any "extra" topping-up purchases (that is, purchases over and
above the amount needed on your interpretation in
respect of the end-February shortfall) did not
take account of the possibility that gilt prices
might subsequently fall further, as indeed they did.
In the circumstances, this particular restriction
has become inappropriate and can be ignored.
I think that in practical terms the se changes narrow
and probably eliminate any gap between us as to the
precise amounts on which you will be compensated.
We had in mind on March 26 the possibility that
the "topped-up" mid-March position would involve
lower amounts than end-March balances.
But as a
result of the further fall in gilts in the closing
days of the month and the modified basis for
valuing your mid-March position as described above,
it now seems that your end-March position is likely
to be the lowest of the three (i.e. September 24th,
mid-March and end-March) and thus the basis for
implementation. This will of course have to await
confirmation when your full returns have been
completed, but I understand that this is unlikely to
take long.
In the meantime, I recollect that you were planning
1
a visit here this month, and I very much hope that
I can see you if this is still on. If you have
firm plans and dates please let me know when you will he in London.