CO129-472 - Others - 1921 — Page 131

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MINUTES.

MINUTES NOT TO BE WRITTEN ON THIS SIDE.

Any reply to this letter should be addressed to-

THE SECRETARY,

TREASURY,

WHITEHALL, LONDON, S.W. 1, and the following number quoted.

F.2866.

gir,

ONAL

128

TREASURY CHAMBERS.

459 day, 1921.

20 AX 21

I have laid before the Lords Commissioners

of His Majesty's Treasury Mr. Grindle's letter of the

7 4th instant with enclosures regarding a proposed 14/4/21

extension of the powers of the Hongkong and Shanghai Banking Corporation.

In reply I am to request you to inform the Secretary of State for the Colonies that My Lords are in general agreement with his views. While They see no objection to the proposed increase of the authorised capital of the bank They entirely concur as to the inadvisability of any extension of the bank's note issue on the tems of one Third Security. Their pre- decessors in agreeing to an arrangement on those terms were influenced in part by the consideration that before that time there had been no guarantee fund specifically allocated to the Notes and in part by the unlimited liability imposed upon the shareholders. But that liability is not an adequate substitute for tangible security and with the growth of the bank's business The Under-Secretary of State,

Colonial Office.

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