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Without knowing the customs of the Chinese one woukl naturally say that is all very well, but how can such poor partner get credit and carry on a fairly large business properly?" Their way of doing it is as follows:-They are all perfectly aware of the custom, they talk among themselves, and those interested find out in that way, that such and such a rich man is partner in the firm they wish to deal with, and they accordingly give the firm credit for certain amounts, but if larger sums are required, they get personal guarantors, for instance, they would advance the firm with the personal guarantee of the rich man whom they believe to be really a partner in it, amounts they would not do without his guarantee. If they advanced the firm itself without that guarantee and it failed, the rich man in question would or could deny being a partner and it is impossible to prove him one: he may be a perfectly honest man, and in their private winding up, no doubt accounts for his own share, but for nothing beyond, except what he has guarantee. From this it is evident, what strong reasons the Chinese have for adopting this mode of business, and the motive at the bottom of it is not dishonesty, although the custom itself may make it easier itself for some to swindle.
To pass an Ordinance making it compulsory for all Chinese to register their true partners under pain of not being able to sue, &c., and also to set the machinery in motion for carrying it out, would be easy, but probably rather expensive, as the work would be so large that a separate department would have to be created—but, would it have the slightest effect of altering the system as it stands at present? I think not. All the firms would register, but I cannot see what reason they would have for registering any names except the partners they register among themselves at present, and who are in law here the actual partners. What proof, except perhaps in very rare cases, could be got to prove the other partners? I have already pointed out, how the question of credit is arranged among themselves, and in practice I think it probable that the Register would not be often referred to, and the ultimate result of such a Bill being passed, would be a department with a great deal of work and absolutely no use.
If any heaven-inspired way of forcing the Chinese to really register their actual parmers were discovered, I do not think it would be to the advantage of Hongkong, it would tend to drive capital away.
JOHN THURBURN.
Appendix IV.
REGISTRATION OF CHINESE PARTNERSHIPS COMMITTEE.
8th July, 1901,
PRESENT:
His Honour Mr. Justice Wise, Chairman.
The Hon. Dr. Ho Kai.
The Hon. Wei Yuk.
The Hon. J. Thurburn.
R. G. Shewan, Esquire.
Leung Pui Chi, Esquire.
also
Sir Thomas Jackson.
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Members.
R. Chatterton Wilcox, Esquire.
J. F. Reece, Esquire.
The Chairman called upon Mr. Reece to give them his opinion from a legal point of view as to the advisability of introducing the Bill.