CO537-(1262-1649) — Page 319

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CO 537/1374

THE NATIONAL ARCHIVES

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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

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OUTWARD TELEGRAM

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Ref.:

THE NATIONAL ARCHIVES

CO 537/1374

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

15488/17/46

Cypher (0.T.P.)

TO HONG KONG (Sir M. Young)

FROM 8. OF S.. COLONIES.

Sent 3rd August, 1946. 16.15 hrs.

No.637 Scoret.

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Your telegram No.564.

Debtor-creditor relationships,

Subject has now been discussed with Uncdougall,

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Before commenting on suggestions in C.A.3366 and your telegrams Nos. 419 and 458 I would inform you of one modification which I have made in my original echome, Modification concerns deposits made with banks during the occupation in japanese currency. It is now proposed that banks will have no liability in respect of any outstanding net deposits made during the occupation in Japanese currency, so that their maximum liability would be the pre-occupation deposit plus any deposits and minus any withdrawals made during the occupation and proved to be in genuine Hong Kong currency, less any excess of withdrawals over doposite in Japanese currency during the occupation. This proposal is justified on the ground that a bank, in accepting deposits, is acting primarily as a holder of currency rather than as a borrower of money and that the risk of depreciation can legitimately be placed upon the depositor. Further there seems no nзed to distinguish between the man who held the Japanese currency instead of depositing it with a bank and a man who deposited it for safe keeping with a bank, proposal should of itself improve the position of baks other than those liquidated in which presumably no, repeat no, deposits were placed during the Japanese occupation.

This

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