Copy.
No. 601/1915.
şir.
Enclosure !.
286
Government House,
Hongkong, 22nd April, 1920.
Difficulties have arisen in the application of Articles 3 and 4 of the China (Companies) Amendment Order-in- Council, 1919, and I have the honour to suggest that it would be advisable to postpone the enforcement of the Order until those difficulties have been discussed.
2.
The drafts of the articles in question were communicated to the Government by the Secretary of State for the Colonies, and Sir Henry May in his despatch No.67 of the 27th February, 1918, expressed his concurrence in the proposed legislation. Unfortunately the effects of the proposed legisla- tion were not fully appreciated at the time.
3.
In the copies of the inter-departmental corres- pondence forwarded by the Secretary of State for the Colonies only two reasons are given for the proposed alteration in the law. They are both instances of particular companies, and it is not clear from the correspondence how those two instances established a case for an amendment of the law,
4.
In the first case, that of "the Hoong On Company" it is stated that "the real control is wholly Chinese and the control of the Board of Directors merely nominal", and that "the company is endeavouring as such to acquire property in the British concession at Hankow". It is believed here that the objects of the special legislation relating to China Companies were (1) greater convenience and (2) better control, but it
is Britannic Majesty's Minister,
PEKING.
does