THE NATIONAL ARCHIVES
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THE NATIONAL ARCHIVES
CO 537/1374
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5.
Should be grateful also for explanation of fire
or 20 million dollars, Assume this le after revaluation and should be glad to know relevant scale and also the apportionment of the loss between the various benka both absolutely and proportionately to the revalued payments and to the essets of the banks,
4. As regards position in Malaya the British dollar remained legal tender throughout the occupation but Japanese military dollars were established as legal tender at par. In preotice the ponsassion of any British notes or expression of any preference to them was regarded as lack of faith in the Japanese causé and usually resulted in the arrest of the individual conc amoâ. As the inflation of the Japanese currency gathered inomen tumm tho Japanese currency became the only effective one in circulation. It can be presumed that moat payments made during the occupation period were made in Japanese currency and contemplated legislation would be based on that presumption, onus of proof of payment in genuine ourrency being on the payor.
5. In communicating with Morse should be glaŭ 17 you would emphasise the point made in paragraph 5 of my telegram No. 637 that it is fully realised that satllemont proposed mey impose some loss on the so-called liquidated banks which might (repeat might) not arise if law were left unchanged, but that Govommont hes an obligation to ensure equitable treatment as between debtor and oreditor in the quite unprecedented cirosmetances of ani enemy occupation. It is well understood that barka would probably not insist in all ossas on their full legal rights, but it is not felt that Goverment can stand asido and leave 1t entirely to the discretion of the banks to arrive at an equitable settlement. If information evallable here is correot banke will still have room for adjustment in settling outstanding claims for interest see paragraph 6 of ng telegram No. 637. Borne might alec be reminded that discussions in London of dureze note settlement took place againet background of possibility that the bank might suffer substantial loss in the ultimate settlemant of the occupation transactions.
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