CO129-555-6 Banking crisis 24-9-1935 - 18-10-1935 — Page 71

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accounts and time deposits in view of the probability of evasion, and the danger that depositors in the sound banks (which will probably be paying less than the maximum fixed at any time) will regard it as safe to transfer to any bank which is paying the maximum "approved by the Goverment".

I might mention two other points, based on banking practice in other countries, which you may find worth further consideration. These are

(1) the legal liability of those responsible, for the

We do not know the

good administration of a "bank".

position under the existing law in Palestine.

(ii) some countries have provision for the compulsory liquidation or reorganisation of a bank which has lost more than a certain percentage of its capital.

This might be of

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advantage, if it can be applied to pull up an unsound bank short of a complete crash.

Yours sincerely,

(Signed) S.D. Waley.

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