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THE NATIONAL ARCHIVES
CO 537/1374
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a holder of currency rather than as a borrower of money and that the risk of depreciation can logitimately be placed upon the depositor. Further, thuro seems no need to distinguish between the man who held Japanese currency instead of depositing it with a Bank and the man who deposited it for safe keeping with a Bank. Prosumably the Bank's position if this proposal were adopted would be much stronger than under my original schomo.
5. The li uidated Banks are of course, not affected by the suggestion in the preceding paragraph since no deposits in Japanese currency wore made with them. I imagino, however, that they would in any caso not wish to make use of authority to pay only a dividond and I should hopo, therefore, that a dividends schomo would be unno cassary in their case. Should they make losses, howovor, then I consider that any uestion of ase is tanco should be dealt with as a problem of rehabilitation rather than of compensation. I observe that you consider it possible that the liquidatod Banks might, if the original schomo word adopted, make either profits or losses. I consider that if they make profits these should be appropriated by Government since it would be undus irable that the debtor-cruditor settlement should result in profits to institutions that were not in operation during the occupation. Thu ucation to which I am still giving considoration, however, is whether in such caso the calculation of profits should have regard to the extent to which claims against dobtors are rualooblo 1.0. when they have disposed of the security involved. I shall addr.es you further on this point in connection with the draft Logislation.
6.
As regards other points made in your savingram, my comments are as followe.
7.
(i) Your Paragraph 1. Proviso ruosted will be covered
by the guidance to courts as to basis of adsuesing hardship (paragraph 4 (5) of my 52599 cyphor (C. A.1.) of 25th March.
(ii) Your paragraph 2. Proposed Lugislation will plac
onus of proof that payment has buen made in pre- occupation curruncy on the beneficiary. If in mos t casos proof is not possible no uffective distinction will therefore be modo but I fuel it is desirablo fully to validatu payments in British currency where there is definito proof. If you still fool that this is impracticable, I should not, however, object if you modify the draft Lugislation.
(iii) Your paragraph 4. I am considering this.
(iv) Your paragrah 9. I have no objection to return to
the Banks of Melayan currency surrenderod and handed over to the Nanpo Kaihatsu Kinko or to the liquidation of the latter.
My Legal Advisors eru drafting Legislation on the basis of my original proposals as now revised above and I will consult you on any further points of principle in transmitting the draft Legislation. In the meantime, if any further comments occur to you regarding the above proposals, you will no doubt sund ther by telegram and I suggust if nucessary you should then con- template sending a representative to London who would be able to bring all the information available on this subject.
Suour.
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