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CO 537/1374
THE NATIONAL ARCHIVES
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CO 537/1374
THE NATIONAL ARCHIVES
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restrictions. Fusted subject to the National Archives' terms and Further information is given in the enclosed Terms and conditions and that your use of it may be subject to copyright
ms and Conditions of supply of National Archives' leaflet.
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CABLE FROM DSO HONG KONG, No. HK/163/46 of 1.5.46.
C. A. 3366. Please pass to Colonial Office CAINE.
O.T.P.
War Office telegram 52785 repeat 52735 F5 March 26th. /.
Debt or creditor relationships. Proposals contained therein
he now received very careful consideration but it is felt acceptance
in toto would be subject to grave objection.
2.
In the first place it appears to us any attempt work out joint plan for Malaya and Hong Kong is foredoomed to failure. Conditions in former colony were quite different in that legal currency and occupation currency were current side by side. There were also probably considerable numbers of cases of capital payments in Malaya not connected with taking over of banks by Japanese. Here such cases are few.
3. Question of settlement is becoming very urgent for as you observe moratorium cannot be lifted until this is achieved.
As efforts formulate proposals acceptable Malaya and Hong
Kong have not progressed to any material extent during last 6 months
it is strongly urged separate plans for each should be agreed to. On this basis it should be possible reach ouick settlement with minimum divergence between two plans. If this accepted we would
be prepared in order reach quick settlement to agree to paragraph 4(1) on understanding Japanese custodian enemy property does not include Japanese liquidator of banks who can in no sense be re- garded as their agent. Paragraph 4(3)(4)(5) are also acceptable.
4. As regards paragraph (2) proposals scale down capital debts not considered practicable. It would definitely not be equitable apply local black market rate to capital payments such as repayment
of overdrafts as this all took place during 1942 and 1943. Any invading army fixes rate exchange in occupied territory at figure very favourable to it. Considerable time elapses before officials within organisation challenge present (?) black market rate and there is further long time before the latter represents something approaching real pur- chasing (group corrupt) currency. There are no records on which rate based on commodity prices could be built up and any rate fixed arbitrarily would be open to serious challenge.
Even if it were
/possible
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