CO129-555-6 Banking crisis 24-9-1935 - 18-10-1935 — Page 46

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they have been given a right to undertake banking business

with the capital approved in their Memoranda of Association

and that this right cannot be taken away by subsequent

legislation.

39. We concede that existing Banks may have acquired

certain rights by incorporation in conformity with the Law

for the time being. If, however, the legislator requires

for the public good to alter the Law, while careful to

respect these acquired rights, the fact that the Company or

Co-operative Society has been incorporated with a certain

capital and with certain powers does not appear to us to

constitute an acquired right for the Company or Society to

do things which the experience necessitating the issue of

a subsequent Law makes clear should not be done or should

only be done in a way or under certain conditions prescribed

by amendments of that Law.

40. We do not, however, desire to precipitate a

crisis and we think that there would be hardship in

applying our recommendation as to a minimum paid-up capital

or "own funds" of £P.25,000 uncompromisingly in the present

case. On the other hand it is impracticable to

differentiate between existing and new companies and

societies in this respect for ever. We therefore think

that existing companies or societies which do not fulfil

this condition should be given a reasonable time, say one

year, within which they must find a capital or "own funds"

of £P.10,000 and a further period of two years for raising

their capital or "own funds" to £P.25,000. If commercial

Banks have not at the end of the period of grace complied

with the condition, we consider that they should be

compulsorily liquidated under supervision of Government so

as to avoid undue hardship and losses to depositors

having