CO129-558-11 Mission of Sir F. Leith-Ross to China- proposals for a Hong Kong - China customs... 29-9-1936 - 30-12-1936 — Page 122

organisation of this Committee and I hope that it will

be successfully carried into effect.

(9) British Banke in China,

The policy of the British Banks in China,

and particularly of the Hongkong and Shanghai Bark,

appears to me to need a radical revision if they are to

maintain their position there. Their main business

hitherto has been that of purc exchange tanka and their

prosperity has depended on the constant fluctuations in

the value of silver: With the stabilisation of the

Chinese exchange, this business should case and they

will be compelled to give greater attention to the

financing of trade. At present they do a moderate

amount of business with British merchants but the

facilities they offer to these might well be extended;

and their relations to the Chinese must be improved.

On this latter point, the policy of the Chartered Bank

compares favourably with that of the Hongkong and

Shanghai Bank, which appears to prefer nursing its

frozen assets in China rather than co-operating with the

Chinese banks to re-organise the concerns affected.

The Hongkong and Shanghai Bank's policy is directed by

the Hongkong office and it is not likely to be altered

save as the result of experience. But the Governor of

the Bank of England might be asked to discuss the whole

position with the London Committee of the Hongkong and

Shanghai Bank and with the Chartered Bank.

(10) Relations of Diplomatic and Consular Officers

to Trade.

I heard a number of complaints from British

traders as to the attitude of H.M. Embassy and Consular

Service to their difficulties.

As regards the Embassy,

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