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assist the Advisory Committee with some of the information
he received, and he could get from them the benefit of their
experience to supplement his own information.
I know that
the U.S.A. system broke down in spite of Government
inspection but I think that it has proved of some value in
Canada. Government inspection is no guarantee against
failure where it is tardily grafted on to a huge existing
system, but in a country such as Palestine, where the
authority of Government is correspondingly greater and where
the inspection begins at an earlier stage of banking
development, I should have thought it had a reasonable chance
of proving a useful regulative force.
I think, also, that all the banks should make
a quarterly return to the Inspector of Banks, and I do
not see why they should not even make a monthly return.
They should also publish an annual balance sheet. I am
not in favour of the incorporation into Palestine law of
general provisions regarding liquidity or minimum cash
reserves.
None of these provisions would be excessively
severe and I should not bother about their effects on the
existing mushroom banks. If any of them is unable to
fulfil reasonable requirements then it had better sell its
business or go out of business and the business could only
be sold to a bank which, in its enlarged form, could still
comply with the requirements of the Law.
Whatever they do, I think they should do it
now before things get any worse.
Yours sincerely,
(Sd.) R. N. Kershaw.
S.D. Waley, Esq., C.B.,M.C.