CO129-434 - Governor Sir May - 1916 [7-8] — Page 249

CONFIDENTIAL

Condosure !.

sir,

HONGKONG.

42374

245

RECO

REG 5 SEP 16

GOVERNMENT HOUSE.

24th July, 1916.

I have the honour to inform you that as a result of the condition of chaos which now obtains in the Kwangtung Province the Canton branch of the Bank of China has closed and

has rented premises and is preparing to open in this Colony.

In reply to an enquiry from me as to the status

2.

of the Bank of China, I have received a letter from His Britannic Majesty's Consul-General at Canton of which I enclose a copy.

Apparently the Bank of China is to be regarded as

3.

a Chinese Government institution. As such its presence here is objectionable since no Chinese official representative except the Chinese Commissioner of Customs is recognised in this Colony. But in the case of this Bank there are the additional objections that according to western ideas the institution is conducted on unsound principles inasmuch as its note issue is not adequately secured, and a grave situation might arise if the authorities of the Bank were to bring pressure to bear on Chinese residents to place deposits in the Bank and the Bank were to get into diffi- -culties. The same remarks apply with greater force to the Bank of Communications which is also to be regarded as a Chinese Government Bank, and is managed on principles even less sound than those which obtain in the case of the Bank of China.

This

bank

THE RIGHT HONOURABLE

ANDREW BONAR LAW, M.P.,

&c.,

&c..

&c...