DRAFT
Personal and confidential
P. Haddon-Cave, Esq.
Hong Kong.
I am sorry to see from the recent exchanges of
telegrams that the six month arrangement should
seemingly have come to an end on a note of discord.
But though an issue of principle has arisen, I am not
now sure that there need be any difference between us
in practice on the amount of compensation for which
Hong Kong will be eligible.
At the cost of this rather
long letter, let me set out the position as I now see it.
Your good faith in this matter has not of course been
in doubt and I certainly appreciate the circumstances
in which you have operated, and that (unjustified)
criticism may arise locally when your topping-up
purchases become known.
But I frankly still find it
difficult to see how the relevant provision lends itself
to your interpretation.
rightly that the point of the guarantee has been to
insulate the rate against pressure from switching out,
the fact is that any guarantee requires a specification
of conditions, and you will appreciate that as a matter
of accountability we have to satisfy ourselves that such
conditions have been fully met. This is why our
telegrams indicated that we were not able entirely to
disregard the fact that the Hong Kong position was
Moreover, although you indicate
somewhat below 100 per cent satisfaction of the se
conditions on three successive monthly reporting dates.
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