CO129-555-6 Banking crisis 24-9-1935 - 18-10-1935 — Page 24

or supervision of Chinese banks, for the following reasons:-

(a) Supervision would be very

6.

difficult, if not practically

impossible. I doubt if the

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mere furnishing of returns would

be of any use.

(b) I am very doubtful if we would

in fact exercise supervision even if

wo had the statutory power.

(c) I do not think that a sufficient

case has been made out for

attempting this very difficult task.

(a) There wuuld probably be a difficulty

in defining the cls. There is

still diversity of opinion as to

I

what constitutes banking business; see

Hart on Biking, p.1.

(e) A were paper control would be worse

than useless.

Mr. Shenton proposes that the dyernor in

Council should have power to order an investigation by a

chart red accountant into the business of any banking

undertaking carrying on business in the Colony. This secr8

to me to be a very dangerous power. There would always be

a danger that it would be exercised too late, because if

exercised except in a bad case it might have a disastrous

effect on a banking undertaking which might otherwise have

succeeded. If this power failed to prevent a disaster the

Government would be blamed. The investigation might of

course be a very difficult, lengthy and complicated matter.

I am not in favour of this power being taken.

7.

Mr. Shenton also proposes power being taken to

apply for the winding up of any banking undertaking carrying