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August which was in answer to my telegram of the 14th August. The arrangements which have been made appear from the following letters, copies of which are enclosed :-
The Colonial Secretary to Messrs. Jolinson, Stokes & Master dated 25th August,
1914.
Messrs. Johnson, Stokes & Master to the Colonial Secretary dated 28th August,
1914.
Messrs. Johnson, Stokes & Master to the Colonial Seeretary dated 1st September, (
1914.
The Colonial Secretary to Messrs. Johnson, Stokes & Master dated 3rd September,
1914.
The telegram which it is proposed that the Bank should send is as follows:-
"You must not draw. New business stopped under "Government regulations German Bank”.
Application is being made through the Military Authorities to the Chief Censor, London, for permission to send the above telegram.
The Right Honourable
LEWIS HARCOURT, M.P.,
dec.,
I have, &c.,
F. H. MAY,
Governor, de.
&c.,
&c.
Enclosure in No. 13.
COLONIAL SECRETARY'S OFFICE,
HONGKONG, 25th August, 1914.
GENTLEMEN, I am directed to inform you that the local branch of the Deutsch- Asiatische Bank will be allowed to carry on business under the supervision of the Hongkong and Shanghai Banking Corporation for the purpose of liquidating its affairs and completing any contracts entered into before the commencement of the war. This permission is given on the distinct understanding that no money will be remitted directly or indirectly to the German Empire, and that no new contracts of any kind will be entered into except such as may be clearly necessary for the purpose of liquidation.
Should any question arise in the course of the liquidation as to whether any particular thing would be authorised by this permission reference should be made to the Government before
any action is taken.
I shall be glad if you will let me know in what way it is proposed that the supervision
of the Hongkong and Shanghai Banking Corporation should be exercised.
I have to add that of course this permission is revocable at any moment without notice in the absolute discretion of His Excellency the Governor.
I have, &c.,
CLAUD SEVERN,
Colonial Secretary.
Messrs. Johnson, Stokes & Master.
Enclosure in No. 13.
HONGKONG, 28th August, 1914.
Re Deutsch-Asiatische Bank.
Sir, We have the honour to acknowledge receipt of your letter of the 25th August No. 132 of 1914 and we have arranged for the business of the Deutsch-Asiatische Bank
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to be carried on under the supervision of the Hongkong and Shanghai Banking Corpora- tion who have deputed Mr. Henry Chamberlain Sanford and/or Mr. George Granville Sutherland Forsyth of their Staff as their Representatives for the purposes of carrying out the instructions contained in your letter now under reply.
In order to keep a proper supervision on the transactions of the Deutsch-Asiatische Bank (for convenience hereinafter referred to as "The Bank") it is proposed that the Hongkong and Shanghai Banking Corporation's Representative (for convenience hereinafter referred to as "The Representative") shall work on the following lines:-
Cash. The bulk of the cash to be deposited in current account with the Hongkong and Shanghai Banking Corporation (which has already been done) and all cheques drawn on this account will be countersigned by the Representative". The cash on hand in "the Bank" will be counted in by the Representative" who holds one key to the lower lock of the Treasury door of the Bank. The key to the other lock is held by "the Bank's" Cashier and the key to the inside grille is held by "the Bank's" Compradore. All duplicate keys have been deposited in a sealed packet with the International Banking Corporation in the joint names of "the Bank" and the Hongkong and Shanghai Banking Corporation and can only be withdrawn on the signatures of both. By this means "the Bank's" Treasury can only be opened in the presence of "the Representative".
Current Accounts. All cheques presented for payment will be initialled by "the Representative" and the entry also initialled in "the Bank's" ledger. No new accounts will be opened by "the Bank" but deposits from present customers will be accepted for accounts now running. Any cheques drawn on the Bank" creating an overdraft or increasing an existing overdraft will not be paid without reference to the Colonial Secretary, unless "the Representative" receives special instructions thereon.
Bills Receivable and for Collection.-These will be collected as they fall due and the money retained here "the Representative" will take joint control with the Bank of all bills and relative documents, godown warrants, etc. Deliveries of documents or goods will only be made against cash payment. New bills arriving will be sent out for acceptance or collection in the usual manner. All vouchers for these transactions will be initialled by "the Representative".
Drafts Drawn on "The Bunk", Hongkong. It is proposed to continue paying these drafts provided they have been drawn previously to the declaration of war. Drafts drawn from places in South America now being presented for payment are all drawn previously to August. These drafts have, apparently, been paid for at the time of issue and in the ordinary course "the Bank" would be reimbursed in London. If payment is refused here the Chinese holders would be the losers. Some drafts are drawn on "the Bank", Hong- kong, by the Government Hauptkasse, Apia, in favour of Chinese here. It is proposed to The pay these drafts provided they were drawn previously to the declaration of war. drafts have already been paid for in Apia, or represent payment for labour performed there. If refused payment the Chinese here would suffer. If drawn after the declaration of it is proposed to refuse payment, though it is probable that the issue of these drafts may have stopped at the declaration of war. The Bank" is reimbursed in Berlin for these draw- ings. Drafts drawn by Agencies of "the Bank" in United States of America are paid from funds in hands of "the Bank" here. These drafts are practically the same as cheques drawn on current accounts, and it is assumed that they must be paid so long as "the Bank" hold funds to meet then here. If it is the desire of the Government that drawings on "the Bank" should cease, steps must be taken to advise the various Agencies of "the Bank" that they are to discontinue issuing drafts on "the Bank".
war,
Any drafts bearing dates after the declaration of war will be dealt with specially and referred to the Colonial Secretary.
Gold Leaf and Bar Silver.-"The Bauk" hold Canton Taels 500 weight of gold leaf which will remain in the Treasury of the Bank". "The Bank" also hold 240 bars of silver, which is now in "the Bank's " Treasury. Of these bars some are held on account of "the Bank", Calcutta Branch, and are retained bere owing to inability to ship. Other bars are held in safe custody on account of "the Bank's" Canton Branch who have sold same to Chinese under an old contract, but it is possible that delivery of part or all may be taken in Hongkong against cash payment. A shipment of bar silver sold by the Bank's
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