CO537-(1262-1649) — Page 325

THE NATIONAL ARCHIVES

1

00110

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cms

Ref.:

CO 537/1374

THE NATIONAL ARCHIVES

restrictions. P Please note that this copy is supplied subject to the Nabonal Archives' terms and conditions and that your use of it may be subject to copyright

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would have the affect of dividing

The possible effect of the Scheme d'ha suggested in The pusilim of the liquidated banks.

`it will necessarily have a seriously

adverse effect

SON

Wps on them fo

Upson

The reasons indicatil below,

i's be held in Suspense

with a view !!

bote being used #toptied eventually for the compensation of those who hav suffund losses from the occupation

KED

between both debtor and creditor.

109

While I appreciate

My

that the bank do not receive any benefit from

payments made to the liquidator it would not be

equitable to place the loss entirely with the

debtor who had no means of contesting the Japanese

right to act on behalf of the liquidated banks.

proposal which te nothing but á division of the

loss between the debtor and creditor, seems in the circumstances more equitable than your own suggestion which will permit banks to gain by the operations

and

of the liquidator in discharging liabilities also

also permite them to gain by invalidating payments

debts due to the banks.

$b

I have of course given careforal thought 10

I appreciate that the liquidated banke? views

may be coloured by the possibility that under my

acheme they may suffer some les9, I am not

however entirely sure that/thie will be the casa

since I understand that in Malaya the liquidated

banks may when their assets and liabilities are

revalued, in secordance wit

make a profit. I consider

proposals actually

this connection that

an profits arising in this way should be taken by Government his apart it does seem that the

hower,

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

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

establish overdrafts unless the debtor was able to

hardship. If therefore the banks are willing

to relinquish interest it may be that they woul

}

J

/reflecti

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