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IN OJ EN
be held in auspense with a view to being used évontulify rớt the compensation of those who have suffered losses from the occupation. This apart, however, it does seem that the banks will not necessarily be involved in loss. Furthermore I understand from Macdougall that the liquidated banks in Hong Kong may themselves be willing, if all overdrafts were fully reinstated, to give up claim to interest which can be deemed to have accrued during the occupation. It is not entirely certain that such an arrangement would be of greater benefit to the banks than my own proposals since the latter would permit banks to claim interest on the outstanding balance of overdrafts unless the debtor was able to establish hardship. If therefore the banks are willing to relinquish interest it may be that they would on reflection be willing to accept my original proposala.
7. I should add that I should see no objection to the scale of revaluation in respect of capital payments being weighted against the Japanese yen if in general it can be assumed that capital repayments were made to take advantage of the special circumstances.
The aim would be, in this as in other features of
the scheme, to distribute the burden of losa between debtor and creditor and not throw it all upon either one or other party. It does therefors seem essential to me to preserve the principle that some value should be attributed to payments made in Japanese currency at periods when a value attached to it.
8. As regards the issue of compensation referred to in paragraph 7 of 0.A.3366 I should make it clear that I do not consider that any claim would lie agoinst government to compensate for lossess resulting from debtor-croditor legielation. Government logislation on this question is essential in the intereate of equity and good administration and as such should not give rise to compensation claims. The legislation will merely determine where the icas caused by the Japanese will li9,
9. I should therefore be grateful if you would reconsider the matter and let me know whether you are now able to agree to my original proposals subject to the modification indicated in peragraph 2 above, If you are able to agree and wish to make a public announcement of the principles of the debtor-creditor Bettlement accordingly I should see no objection to your so doing,
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