کیم

Any further communication

on the subject, please quote

No. 71586/10.

and address--

The Controller,

Foreign Trade Department.

Telephone: Gerrard 8640.

40836

459

RTRADE DEPARTMENT,

LANCASTER HOUSE,

ST. JAMES,

26 August, 1916.

S.W.

sir.

With reference to your letter of the 17th instant, I am

directed by Viscount Grey of Fallodon to state that he concurs

in Mr. Bonar Law's proposal made in paragraph two of the letter

of the 17th August from the Colonial Office to the Board of

Trade and agrees that if this proposal is adopted it will be

necessary to pass such legislation by ordinance in Hongkong and

by order in Council in China as is mentioned in the third para-

graph of the letter to this Department.

Neither the letter from the Colonial Office to the Board

of Trade, to which reference has been made, nor the circular of

July 15th referred to in that letter, deal with cases where British China Companies have reconstructed as British Companies,

and shares in the reconstructed Companies have to be allotted

to enemy shareholders in the old Companies.

In cases of reconstruction of China Companies where the new Company has been reconstructed as a German Company, Viscount Grey has given authority to the liquidator to allot shares in the new Company to enemy shareholders provided the rights of British shareholders have been adequately protected, this course being in accordance with the proposal contained in the conclud- ing paragraph of the Colonial office letter of the 16th March.

Under Secretary of State,

Colonial Office,

You

81024

Sir/

Whitehall, S.W.

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