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To Foreign Office, No.344 of 13th May, 1920, from Peking. 297
Peking,
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My Lord,
13th May, 1920.
On receipt of Your Lordship's telegram No.94 of 17th
March, requesting that the Crown Advocate and Consul-General
at Shanghai should be consulted as to the probable effect of
the introduction of a licence system for British China Com-
panies whose business was affected by the provisions of the China (Companies) Amendment Order in Council of 1919, a des-
patch was addressed to Shanghai on March 26th of which I have the honour to enclose a copy.
The despatch from Peking crossed one from Hia
Majesty's Consul-General at Shanghai in which Sir E. Fraser
indicated that the issue of licences was not favoured by him
or by His Majesty's Judges (enclosure 2).
I have now received from His Majesty's Consul-Genera
a further despatch, covering opinions on the subject from the
Crown Advocate and the Commercial Counsellor. The Crown
Advocate is of opinion that the Order in Council does not
preclude the employment of an alien as manager of any particu- lar business in a China Company, provided that such employment does not amount to general or substantial control of the Com-
pany's business. Mr. Fox's comment appears to cover substan-
tially the same ground.
In the meanwhile I understand that the British-
American Tobacco Company, the Company most directly affected by
the Order has decided to move its head-quarters to Hongkong,
where an American Managing Director can still function if necessary in the general interests of the business. Should the Company desire to make any further representations they
will no doubt do so in London, where the responsible heads of
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