CO537-(1262-1649) — Page 200

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THE NATIONAL ARCHIVES

00164

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Ref.:

CO 537/1369

THE NATIONAL ARCHIVES

N

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 copynght

efer to arrive at an agreed solution rather

fall back won

han, for example, any such course as

erely leaving the Bank's liability for

he durese notes to be tested in the courts.

In view of this position, I thought it

leisrable to try and suggest any means by

which the Bank could be helped to

overcome their own difficulties in sharing a

reasonable proportion of the loss and it was

with this in view that I made the suggestion

in paragraph (b) towards the end of the enclosed

note that some portion of the loss to be borne

by the Bank, of the order of £1 million,might

be covered by permitting the Bank (by legislation)

amount.

to increase their fiduciary issue by that

This would not, of course, diminish

the Bank's liability under a settlement, but

would mean that they would not actually have

to put up cash to the full extent of their agreed

liability.

As you will see from the record we

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left it that we for our part would seek your

views on this possibility, while the Bank's

representatives would consider it on their side.

I should be grateful to know whether you think

that it would be desirable from the Government

point of view to reach a settlement with the Bank

on these lines. If it would help for us to

discuss this, I shall, of course, be glad to do

80.

160

Yours sincerely,

(B. Caine.)

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