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3. It is hardly necessary to point out that this new law conflicts, as Chinese law has always conflicted, with British law governing the status of British subjects of Chinese descent.

British subjects of Chinese descent, for purposes of protection in China, are divided in the following classes:--

(1.) The children born in the colony of Chinese parents, the father having been previously naturalised by the Legislature of the colony.

(2.) The children of parents of Chinese origin, who were themselves British subjects, having been hoth likewise born in the colony.

(3.) The children born in the colony of Chinese parents subjects to the Emperor of China.

(4.) The children of Chinese parents who were resident in the colony at the time of its cession to the British Crown.

(5.) Residents in the new territories of the colony at the time of the cession of the said new territories to Great Britain.

The forms of certificate of birth or nationality furnished by this Government to persons of each class, revised in accordance with Mr. Lyttelton's despatch under reference were forwarded in my despatch marked "Confidential" of the 13th July,

1901.

4. Since then your Lordship has ruled, in Confidential despatch of the 25th of last February, that British nationality cannot be claimed for persons in class 3.

It has been held in the past (see pp. 78 and 79, memorandum by Mr. R. W. Brant, of the 8th November, 1898, and memorandum by Sir J. Pauncefote of the 15th March, 1879, of the printed correspondence respecting British protection to Anglo-Chinese in China, which formed an enclosure to Mr. J. Chamberlain's Confidential despatch of the 17th July, 1903) that persons in classes 1, 2, and 4 are by British law held to be entitled to protection in China, and the certificates for these classes indicate this fact.

The Law Officers of the Crown appear to have advised in 1867 (p. 79 of the printed paper referred to) that no claim of jurisdiction in China over the children born in Hong Kong of Chinese parents, subjects of the Emperor of China, should be asserted or allowed by His Majesty's Government.

Nevertheless, it was decided in the correspondence which formed enclosures to Mr. Lyttelton's Confidential despatch of the 6th May, 1904, to delete the words in the certificates formerly used for this class indicating that the holder was not entitled in China to British protection, and to substitute the form of words appearing in the revised certificate.

Cases coming under this particular class are the most numerous, and have, conse- quently, given the most trouble, and it is in my opinion open to question whether the decision to afford persons in this class protection in China was a wise one.

It is certainly anomalous that protection should be extended to this class and to persons in class 1 and should be denied to person in class 5.

5. The Chinese law now submitted by article 1 a denies recognition by the Chinese authorities of nationality other than Chinese to persons in any of the classes above enumerated. This is a matter which seriously affects a large section of the population of this colony. For instance, both Dr. Ho Kai, C.M.G., and Mr. Wei Yuk, C.M.G., belong to class 3. These gentlemen claim that by taking the oath of allegiance they have formally renounced their Chinese nationality. Dr. Ho Kai has expressed his willingness to comply with rule 1 of the special rules appearing under chapter 5 of the law, and he considers that the rule in question applies to his case. Eut before I permit him to do so I shall be glad if your Lordship will communicate to me your wishes in the matter,

I have also to ask for instructions as to what action, if any, I am to take in the matter of the continuance of the issue of certificates of birth to persons in classes 1, 2, and 4 who may apply for them for use in China. In this connection

I may say that it seems very desirable to induce the Chinese Government to recognise some stage in descent at which it will withdraw its claim to regard Chinese born in Hong Kong as Chinese subjects.

6. I have sent a copy of this despatch to His Britannic Majesty's chargé d'affaires at Peking.

I have, &c.

F. H. MAY, Officer Administering the Government.

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Enclosure 2 in No. 1.

Chinese Law of Nationality.

[See Enclosure 10 in No. 2.]

Enclosure 3 in No. 1.

Memorandum.

1. SIR F. H. MAY in forwarding the new Chinese law of nationality argues that:-

(1.) The Secretary of State has ruled that British nationality cannot be claimed for persons resident in the new territories at the time of the lease.

(2.) It is open to question whether protection should be afforded to natural born subjects who are the children of Chinese subjects.

(3.) It is anomalous that protection should be given to the latter and not to residents in the new territories. He also asks (a) whether certain Chinese gentlemen may avail themselves of the provisions of the new law to renounce Chinese nationality ? and (b) what action, if any, lic is to take with regard to the issue of certificates to the other classes of Anglo-Chinese ?

2. Nationality of Persons resident in the New Territories.-Sir F. II. May has not stated the position quite accurately. The correspondence ending with the Secretary of State's Confidential despatch of the 25th February, set forth fully the view taken by the Foreign Office and the Colonial Office on the status of these persons. The Foreign Office in their letter of the 25th January pointed out that the Law Officers' opinion as to the British nationality of the residents in the new territories had not been communicated to the Chinese Government and would not (probably) have been accepted by that Government. In the letter of the 21st February the Foreign Office went further and said that Liang Tou, within the limits of the Chinese Empire, must be deemed to be a Chinese subject. But in the Colonial Office letter of the 18th February, in which the Foreign Office expressed concurrence it was stated that the question of national status should be allowed to drop in the manner least prejudicial to any contention which His Majesty's Government may wish to uphold in the future. In other words no fiual ruling has been given as yet.

3. The question was complicated by the fact that Hong Kong pressed for Liang Tou's extradition instead of demanding, through the consul-general, that he should be handed over to the Consular Court. The Viceroy might possibly have refused this concession on the same ground as he refused extradition. But in any case there is a difference which Sir F. H. May does not appear to notice. The certificate system is meant for the protection in China, against Chinese courts, of persons registered at the British Consulate as British subjects. Due notification of such registration is to be given by the consul to the Chinese authorities, so that if they disputed a claim on the part of a resident in the new territories to the status of British subject the question could be raised at once; or, if not raised, the person in question could fairly be assumed to be of British nationality in the absence of any protest.

The question of Liang Tou is the converse: he did not want protection as a British subject against Chinese courts; he was claimed as a fugitive from British justice. I do not think that the temporary decision in Liang Tou's case need interfere in any way with the issue of certificates to residents of the new territories who desire to trade at treaty ports.

4. (2.) Protection to Natural-born Subjects of Chinese Immigrant l'arentage.--It appears to me to be now too late to reconsider this question which was carefully considered in 1903-4. Such persons have in practice been protected, and the implied idea that protection should be abandoned because such cases give trouble should not be accepted.

5. (3.) The Anomaly of Protecting Children of Immigrants and not Residents in the New Territories.--I have tried to show in paragraph 3 of this memorandum that the case of Liang Tou affords no sufficient ground for holding that His Majesty's Government have decided to abandon the protection of residents in the New Territories. If I am correct Sir F. II. May's arguments are not valid.

* An escaped murderer from the new territories arrested by the Chinese, who refused to surrender him to Ilong Kong.

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