7.
121
+
rise in this country.
9.
It is not easy to estimate with any exaetness
the effect which Sir John Brenan's proposals would have
on the number of companies at present on the register
and the income derived from fees. I asked Sir John
Brenan if he was able to make any estimate, and I enclose
a copy of the memorandum which I received from him in
reply. While it is not possible to produce accurate
figures, it would appear that the loss to the Foreign
Office rould be negligible, though the loss to the Hong-
kong Government would be considerably greater.
10.
I have avoided as far as possible encumbering
this despatch, which deals with principles, with the
consideration of particular cases, but in view of the
mention in paragraph 14 of Sir John Brenan's despatch
of the bankruptcies of the Bank of Canton and the Nation-
al Commercial and Savings Bank, a brief reference to
these cases may not be out of place. Both these banks
are Hongkong China companies, with branches in Shanghai,
Hankow, Canton and elsewhere but they are not entitled to
British protection in China. They suspended payment
almost simultaneously and liquidators were appointed by
the Head Offices in Hongkong. The branches in China
were to all intents and purposes Chinese concerns and
were members of the Chinese bankers' associations. The
utmost confusion ensued with regard to the liquidation
of these branches. Only in the case of the changhai
branch of the Bank of Canton was an attempt made to
comply strictly with the Hongkong Companies Ordinances.
/ In