CO129-555-6 Banking crisis 24-9-1935 - 18-10-1935 — Page 25

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on business within the Colony.

There are already powers

under section 132 of the Companies Ordinance. Any further

power probably would involve the proposal referred to in

the previous paragraph. I therefore an not in favour of

this power being taken.

8. Mr.Shenton also proposes that all banking

undertakings carrying on business within the Colony should

make a return in the form set out in Form C in the First

Schedule to the Companies Ordinance Ordinances Vol. IV,

p. 2161.

This form is applicable only in the case of

companies.

It could be adapted to other banking institutions,

but I very much doubt the utility of the proposal. I think

that it is really involved in the investigation proposal, which

I think is undesirable.

9. The most modest proposal is that all future

banking companies formed under our Companies Ordinance should

not be allowed to commence business until they have satisfied

the Registrar of Companies that a certain amount of paid up

capital has been collected. No suggestion has been made yet

as to what the amount should be. It seems to me that the

chief objection to this proposal is that it does not deal with

the case of a banking undertaking commenced outside the

Colony and establishing a branch here. We might provide that

such an undertaking must satisfy us that it had a certain amount

of paid up capital, but it would be very difficult to verify

any such claim. For example, how could we be sure that a bank

established at Canton had the necessary paid up capital?

10. On the whole, as at present advised, I am against

any legislation. The Instone Banking Corporation Ltd., is so

far an isolated case, and I think that its failure, and the prosecution of Mr.Brewer, will for some time serve as a

useful warning.

The failure involved no great loss and caused

no general dislocation.

(sd.) J. H. Kemp

Attorney General.

15.

2.

30.

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