ABSTRACT
In 1942, as the Japanese forces moved down the Malayan Peninsula, the bankers packed up their books, loaded their cars, and drove ahead of them into fortress Singapore. There, under siege, they set up mini-offices in their respective main branch buildings, with little sign of which branch or agency was at which counter. After all, their customers had fled with them. And while the soldiers battled, the bankers sat down to put the books in order. Soon they would be in Japanese hands and the Yokohama Specie Bank would be in charge, ready to liquidate the foreign banks but also aware of the importance of the books and prepared to retain and even maintain them. The banks’ experiences were not everywhere the same, although final
scenes were similar. In Hong Kong, the Hongkong and Shanghai Banking Corporation (the Hongkong Bank) had been caught with unsigned and unissued banknotes totalling in value the sterling equivalent of over £7 million; these the bank’s officers were forced to sign, thus creating the duress issue.1 Rangoon office moved by train to Mandalay, later to be overrun once more. In Shanghai, there were recriminations in Mercantile Bank as their eccentric manager refused to cooperate. But in all cases the books were up to date. Indeed, during the war, attempts – partially successful –were made to smuggle out the books to enable, for example, Hongkong Bank’s emergency London Head Office to reconstitute the accounts. In the worst years of the 1930s depression, a Hongkong Bank staff
member wrote complaining of salary prospects; the chief executive replied negatively, adding that if he really had the interests of shareholders at heart he would sell up the bank and deposit the proceeds at interest in the Post Office Savings Bank. Now with all branches lost east of India, questions again arose as to profitability, even solvency. The Hongkong Bank was unique in having its head office in the East, but the bank’s chief executive,
Sir Arthur Morse, his books partially reconstituted, convinced the Treasury that the bank was viable. When China went off silver in 1936, all reserves had been centred in London and were thus available. With exchange banks the focus was on trade finance and consequently the war meant loss of income; assets were less affected. Then standard accounting procedures called for writing down to zero the value of buildings and no book loss would be reflected there. Meanwhile, planning units, separate for each occupied territory, were
established in London, with a membership which included exchange bankers. Fortunately the war ended suddenly and the banking plans, which bankers thought to be mostly without merit, were not implemented. Asian cities did not have to be recaptured street by street with consequent destruction. However Jesselton, capital of British North Borneo, was in ruins due to Australian bombing, the recapture of Manila had devastated the bank’s building there, and elsewhere the returning Allies found buildings run-down, mines requiring rehabilitation, and factories unable to operate efficiently.2 The banks would have an immediate role to play, if they could play it. And with the end of hostilities and with books in place and offices serviceable, the banks were apparently ready to reopen.
