Communication Received from United Kingdom
Delegation Concerning Release of Sterling
Balances after 15 May
May I refer you to your letter of 6th May regarding the Commission’s views on the release of Sterling Balances after 15th May, 1948.
2. The Commission’s views as set out in your letter were duly brought to the notice of His Majesty’s Government and I have been instructed to reply as follows:
(i) His Majesty’s Government have carefully considered the views of the Commission in this matter but they regret that they are unable to depart from the position set out in my letter of 2nd May.
(ii) In order to clarify the position, His Majesty’s Government issued a statement for publication in the press in London at midday today - 14th May. The text of this statement is as follows: -
“In view of present conditions in Palestine and in particular of the fact that no effective central exchange control authority will for the time being exist with which the necessary arrangements could be discussed and by which they could be administered and controlled, His Majesty’s Government have decided that it is impracticable at present to make further releases of a fixed amount in respect of any period after 15th May. Nevertheless, in order to meet the situation as far as possible, His Majesty’s Government will consider applications from individual banks submitted through their correspondents in the United Kingdom to the Bank of England for releases from their blocked accounts of reasonable sums required to make essential payments in sterling. Before approving any such applications, His Majesty’s Government will require to be satisfied that the payment is for a purpose for which it is proper that a release should be made and that it cannot be met out of sterling already released or from current accruals which many cases will be available. His Majesty’s Government have expressed their willingness to discuss more permanent arrangements as soon as circumstances render this practicable.”