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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
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Debe
Draft
on
15488/46
more tory of state for the Colonies Offiour Adsinistering the deverasini of
00119
15
MALAYAN UNION 12/
(1) only (2)
• (both)
(1) - (2)
GILGAPORE
Your delegrum 503 and 538. My telagron 10. 467.
Debter-creditor rel»tionen på
I have new considered prepossis
is your savingrom No.110
in Paleyan Union s'viagram 16. 110%
171
116
In view of what follows I hope it may not be necessary for a member of the Colonial Office to travel to Malaya in order to arrive at a definite scheme. I am in any case unable to spare anyone at the present time.
2.
I should in the first place, however, say that there are certain points about which I am not entirely clear. I should have liked to have had the results of the enquiries of the two Committees on the Banks referred to in B. M. A. a telegram No.9126, as well as some estimate of the probable scale of revaluation which would be adopted since this information would be helpful in judging the extent to which the assets of the local Banka would be ade uate to meet their liability as revalued. Furthermore I am not entirely clear as to the difficulty referred
to in paragraph 8 of the savingram under reference concerning the Dai Nippon Savings Bank. I should have thought that no obligation would rest upon the prosent Malayan Governments to meet any claims on a Japanese Bank and that therefore Malayan Governments would be fully justified in not admitting responsibi- lity for claims.
3.
Nevertheless while I should be grateful for the information referred to in the preceding paragraph I accept the judgment in paragraph 5 of the savingram that the application of the revaluation formula might result in a crippling loss to the local Banke. There seems to me, however, to be strong objections to the proposal that such Banks should only pay a dividend. In the first place the dividend could not be ascertained excent after a very long delay since though the Banks would not officially be bankrupt they would be obliged to go through the procedure of ascertaining assets and liabilities involved in bankruptcy proceedings. Secondly, the fact that Banks would probably ay very varying dividende would be a disadvantage. Thirdly, even if it were true that the local Banka would be crippled, it would seem more appropriate to deal with this situation on the basis of Government assistance towards the rehabiliation of such Banks as are deemed e sential to the community. In such case the assistance would, however, be related to the whole position of the Bank and its needs rather than to the loss auffüred as a result of the debtor-creditor settlement.
In
4. I have come to the conclusion, however, that the following alternative suggestion should remove most, if not all, the difficulty as regards the local Banks. The suggestion is that the Banks would have no liability in respect of any outstanding net deposit made during the occupation in Japanese currency.
• other words, their maximum liability would be the pre-occupation deposit plus any deposit proved to be in Malayan currency (on which seo below) less all withdrawals (including withdrawals in Ja enʊso currency) during the occupation. This is a signifi- cant change from my original proposals and is justified on the ground that a Bank in accepting deposits is acting primarily as
a
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CO 537/1374
THE NATIONAL ARCHIVES
2
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
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