CO129-557-9 British protection of companies in China 26-3-1936 - 27-2-1937 — Page 121

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rise in this country.

9.

It is not easy to estimate with any exaetness

the effect which Sir John Brenan's proposals would have

on the number of companies at present on the register

and the income derived from fees. I asked Sir John

Brenan if he was able to make any estimate, and I enclose

a copy of the memorandum which I received from him in

reply. While it is not possible to produce accurate

figures, it would appear that the loss to the Foreign

Office rould be negligible, though the loss to the Hong-

kong Government would be considerably greater.

10.

I have avoided as far as possible encumbering

this despatch, which deals with principles, with the

consideration of particular cases, but in view of the

mention in paragraph 14 of Sir John Brenan's despatch

of the bankruptcies of the Bank of Canton and the Nation-

al Commercial and Savings Bank, a brief reference to

these cases may not be out of place. Both these banks

are Hongkong China companies, with branches in Shanghai,

Hankow, Canton and elsewhere but they are not entitled to

British protection in China. They suspended payment

almost simultaneously and liquidators were appointed by

the Head Offices in Hongkong. The branches in China

were to all intents and purposes Chinese concerns and

were members of the Chinese bankers' associations. The

utmost confusion ensued with regard to the liquidation

of these branches. Only in the case of the changhai

branch of the Bank of Canton was an attempt made to

comply strictly with the Hongkong Companies Ordinances.

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