CONFIDENTIAL
DRAFT TELEGRAM
To: HADDON -CAVE (HONG KONG)
From: BARRATT (TREASURY)
I said in my telno 140 that I hoped to be in touch with you again more subatantively soon, and I am now able
Our informal discus- to tell you what we have in mind. sion with you and with one or two other major holders on the possibility of a gentlemen's agreement approach were valuable, but we have concluded that this approach does not measure up in practice to what is now needed in the present exceptionally uncertain situation.
2. In this situation, and because neither HMG nor many holders are likely to be interested in being bound by any new formal set of mutual obligations for two or three years, HMG has decided to extend guarantees until
the end of 1974.
3.
The present guarantee structure will be maintained, but there are a number of modifications which should both make the guarantee more attractive and put it on a more
objective basis.
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