TELEGRAPHIC ADDRESS.
SONIFACE, STOCK, LONDON.
"ALL LETTERS TO BE ADDRESSLO
REMITTANCES HADE PAYABLE TO
THE HONGKONG AND SHANENAI BANKING CORPORATION"
MOT TO INDIVIDUALE.
00157
The Nongkong and Shanghai Banking Corporation.
INCORPORATED IN THE COLONY OF HawaKoNS. THE LIABILITY OF MENBERG IS LIMITED TO THE EXTENT AND IN MANNEN PRESGRIVED BY OrdinANCE NO. É or 1920 or THE COLONY.
9. Gracechurch Sheet London. 5.C.3.
February 6th, 1946. Y.
154
8
THE NATIONAL ARCHIVES
cms
CO 537/1369
Ref.: restrictions. Further information is given in the enclosed Terms and Conditions of supply of National Archives' leaflet. Please note that this copy is supplied subject to the National Archives' terms and conditions and that your use of it may be subject to copyright
Dear Caine,
In order to enable me to submit to Morse the
suggestion which you put forward yesterday as to the relative proportions in which the loss to the Exchange Fund consequent
on the validation of the unlawfully issued notes might be
borne by Government and the Bank, I shall be glad if you will
confirm or correct the version of the proposed formula which
Reid, Muriel and I understood as follows:-
1. The Bank to agree to accept the unlawfully issued
notes as its own bank notes on the sale basis as all its notes lawfully issued subject to the following terms
2. Legislation to be passed in Hong kong declaring
the notes as legal tender currency of the Colony.
3. The Government to issue a Certificate of Indebted- ness for the amount of the whole of the unlawfully issued notes less the equivalent of £1,000,000 sterling. In consideration of this the bank to deposit with the Exchange Fund
4.
(a) immediately the amount of £1,000,000,
(b) as and when information is available to shew
what port on of the unlawfully issued notes has been used in discharge of the bank's legal liabilities, the sterling equivalent of the full amount of such portion.
The equivalent of £1,000,000 which is not covered by the Certificate of Indebtedness to be treated as an increase in the fiduciary issue without any cover from the bank and legislation to be passed
authorising this increase.
The formula i, of course, understood to be
without any implication of any legal liability.
S.Caine, Esq.,C.M.G.,
Colonial Office,
Dover House,
WHITEHALL,3.W.1.
Yours sincerely,
J. Rares
2
Jos