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8. The Committee carefully examined the Hon. Mr. Shenton's proposal to charge ad valorem transfer duty on the sale contract note and to charge no duty on the transfer instrument. Various criticisms of this proposal are given in the appendix. It will of course be seen that the criticisms are not a single body of reasoned argument but are in- dependent criticisms. The chief reasons which led the Committee to reject this proposal are the two following. In the first place, the Committee is not satisfied that the pro- posal would be effective. The public will pay a light and convenient duty, but will often. try to evade a heavy or inconvenient duty. The heavier duty on sale contract notes might lead to evasion of the provision that a share contract note must be made out on every sale. The duty would also be a somewhat less convenient one than the present duty on share contract notes, where the stamped forms can be obtained in bulk beforehand. If the proposal were not effective it is even conceivable that the revenue from transfer duty might fall. In the second place, if the proposed legislation were generally observed, there would undoubtedly be a large increase in the taxation levied on share transactions. That might tend materially to reduce the business in shares, and might drive away capital from the Colony. Brokers would be seriously affected, and it is even conceivable that the revenue might ultimately suffer.

9. The Committee would like to draw the attention of the Government to the sug- gestion contained in paragraph 16 of the Appendix, that the Collector should regularly keep a record of the amount received by way of transfer duty, in case the proposal to in- crease the scale of share contract note duty and to abolish share transfer duty is revived.

10. It was objected in some quarters to some of the proposals that if they were adopted the Government would be departing from a bargain entered into with the stock exchanges at the time of the passing of the Stamp Ordinance, 1921. The Committee can- not agree that the discussions which took place then can properly be represented as con- stituting a bargain which would tie the hands of the Government for all time.

Dated the tenth day of August, 1929.

(Signed)

J. H. KEMP, Chairman.

M. J. BREEN.

R. H. KOTEW ALL.

A. C. HYNES.

J. P. BRAGA.

B. D. F. BEITH.

J. SCOTT HARSTON.

LI TSZ FONG.

P. TESTER.

E. M. RAYMOND.