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(No. 77.) Sir,
Inclosure 1 in No. 1.
Consul-General Sir P. Warren to Sir J. Jordan.
Shanghae, June 6, 1907. I HAVE the honour to acknowledge the receipt of your despatch No. 25 of the 8th May, inclosing copies of correspondence from the Foreign Ofhce on the subject of Companies registered in Hong Kong and their right to recognition and protection as owners of British ships. I have discussed the question with Sir Havilland de Sausmarez, Juige of His Majesty's Supreme Court, and I have the honour to inclose a letter from him stating his views on the subject, and also a letter from Mr. Bourne, the Assistant Judge, who gave the opinion regarding this question expressed in my despatch of the 21st December, 1906. In the inclosed Memorandum the whole circumstances of the case are briefly summarized, and I have the honour to refer especially to the three following points
1. It is clear from the correspondence that Companies registered in Hong Kong, but with a preponderance of foreign capital and without their principal place of business in the Colony, are not entitled to Consular protection.
2. Companies registered in Hong Kong, and having their principal place of business in the Colony, but having a preponderance of foreign capital, would appear to be entitled to registration under the Merchant Shipping Act of 1894. Mr. Bourne is of opinion that in such a case the "extent of protection can be regulated by the Secretary of State, but the Companies are nevertheless justified as far as can be seen in their demand for registration of their ships under the Act of Parliament.
3. A third case, and perhaps the most common of the three, is the one in which a bond fide British Company registered in Hong Kong, having British Directors and a preponderance of British capital, yet has its principal place of business in a Treaty port. Is it possible that such a Company is precluded from being the owner of a British ship P At the present moment I have before me eight applications from the Taku Tug and Lighter Company, a bond fide British Corporation having its head office at Tien-tsin. It would appear that these application, should properly be retused unless it is the intention of His Majesty's Government that Consular officers are justified in interpreting "ex-territorial rights" on the lines indicated on p. 3 of the inclosed Memorandum.*
I have the honour to submit these points for your consideration and to request that instructions may be issued as to the attitude which may properly be adopted in future towards Companies applying for registration of their ships under the above
heads.
Beyond the provisions of the Merchant Shipping Act of 1894, there is little shipping legislation which can be enforced at the Treaty ports of China, and in many instances the jurisdiction covered by this Act is limited to the "United Kingdom." Whilst fully realizing that it would be both difficult and unjust to bind British Shipping Companies in the Treaty ports by the rules and restrictions in force in England, I am nevertheless of opinion that it would be advantageous if Consular officers felt justified in their executive capacity in enforcing a liberal application of these laws, in so far at least as the safety of ships was concerned. In the various clauses at the end of each part of the Act dealing with the application of the law, such latitude would appear to have been contemplated when the Act was framed. It is, however, of such importance that I think it would be well if special instructions could be issued on this point. If there is justification for interpreting section 1 (d) of the Act as applying to the Treaty ports of China, it is possible also that the same interpretation might be given to several other portions (notably section 92, which provides that British ships shall carry a competent master and officers), and that a more effective control might therefore be exercised over the shipping in these waters.
I have, &c. (Signed)
P. WARREN.
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Inclosure 2 in No. 1.
Sir H. de Sausmarez to Consul-General Sir P. Warren.
My dear Warren,
Supreme Court, Shanghae, May 24, 1907. THE question of the registration as British ships of vessels owned by a Hong Kong Company which consists of Chinese and other foreigners is one which has been on my mind for some time. At the time the question relative to the "Canton I was in hospital and I expressed no opinion. What my opinion is I expressed publicly in court in the case of the "Culmore " on the 6th February, and you will remember that I subsequently advised you to remove that vessel from the register if she was not shortly sold, as it appeared at the trial she was likely to be.
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arose
The right of the vessel to registration was not before me in the case, but I elicited the fact that the ship was owned entirely by Chinese and Germans, that they owned this one ship only, and that all the business of that ship was done in Shanghae. I send you a copy of my remarks at the close of the case as rather badly reported in the local press, which indicate clearly my opinion.
I do not know what was submitted to Bourne, and I am passing on the papers to him,
My views on the subject generally are strong. It is possible for a Company to be formed under British law of which no members are British. It may own a British ship, if the view of the law tacitly accepted throughout the correspondence pat before me is correct, and may therefore fly the British flag. Though our Government may refuse to protect such Companies, it is very difficult for them to refuse to protect the flag, nor, if I may be allowed to say so, ought they so to refuse. Under these circumstances such a Company ought to be held most strictly to the conditions imposed upon it by the Merchant Shipping Act.
The confusion in this case has probably arisen from the fact that it was sought to refuse registration on the ground that the direction and main body of shareholders are not British. Right to registration is founded on the Merchant Shipping Act, and I indicated in the "Culmore" what my view is on this point. I do not think I am asked to express a view on the right to withhold registration on the former ground, but I should very much doubt legality of such refusal. If it should be insisted on, the matter is certain to come before me, so I would rather leave it to the legal advisers of the Government.
Yours very truly,
(Signed) H. W. DE SAUSMAREZ, Judge of His Majesty's Supreme Court, Shanghae.
Inclosure 3 in No. 1.
Remarks in the Case of the Steam-ship" Culmore," by Sir H. de Sausmores.
HIS Lordship said that he wished to mention that in this particular case it had been brought to his notice that this vessel was not owned by an individual British subject, and if it was entitled to be a British ship at all it was under section 1 (d) of the Merchant Shipping Act. From the evidence before him it seemed to him that prima facie the principal place of business of the Company might be Hong Kong, but it was a matter that he would certainly have to bring to the notice of the represen- tative of the Board of Trade. The managing owner said all of the business was carried
on bere.
Mr. Jones said the Company had a registered office in Hong Kong,
His Lordship said that did not make it a British ship. He would consider the question, and after having looked into the matter of the Company's principal place of business he would certainly bring it to the attention of the Consul-General.
Mr. Jones said that if it brought about some legal action for the registration of Companies here it would be an excellent thing.
* See p. 5
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