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to the Colony and the exhibition of a name board out- side some longkong lawyer's office which thus became the 'registered office required by the Ordinance appli- cable. The came of the Belgian Industrial Bank of China, Limited finally proved how the system jeopard- ised our good name in China without any British Court being able to deal with the aliens constituting in fact a company held out as British to the Chinese.
The proper steps to be taken were discussed very fully not only at the conference to which the Crown Advocate refers, but also in correspondence between His Hajesty's Legation and the Foreign Office. At that time it was pointed out that, since the Colonial Government's interest in China Companies was (and still 1) preponderantly as yielding income, cordial cooper a- tion in our effort to make such companies genuinely British could scarcely be looked for.
The Colonial Office steadfastly upheld the Colony its refusal to nart with a source of revenue; and the
tish authorities in Chins finally accepted tim compro-
se embodied in the Order tapether with a promise that
case a few years' working showed the control enacted
be ineffectual, the urder should be szanded.
Apart from the theoretical objection recorded by
» Grown Advocate the proposal to have an independent
registry for China companies was rejected partly because of a far (since proved infounded), that a large and cost- lly office organization wouló be essential and partly be- muse Inglish practice permitted, as such cases as those in the Anglo-Austrian Bank and the Austrian Export and
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Import Company, Limited showed, of British companies as completely alien as the Hongkong practice had allowed.
The terms embodied in the 1910 Order were in 1917 discussed with His linjesty's Jurige because it was found by experience that the existing control was not in fact aderante. The "ording seems to have been misunderstood by any other than Azericent. There is no prohibition of the employment of alien experts as technical managera or in any other important position, provided that such alien does not in fact exercise the general or substan- tial control of the company's working usually associated with the office of managing director. I venture to sutpat that this fact provides such relief as is essen- tial to the British-American Tobacco Company while securing adequate control for our authorities.
The enactment as to the peat of the directorata not being in itself sufficient to withdraw a company from the provizione as to China companies seems to me must desirable in view of the fact that longkong-China companies need not have even one British director and may have alion managing directors. For instance, the *** Ving On (China) Company limited has resident here the two officers who alone can affix the Company's seal which is kept here: it is hard to suppose any better proof of substantial control over such a company,
The swended Urder in Council was no sooner promul» gated than attempto were made to avade it. 'Holding companies' were ruled out by His Majesty's Cuprene Court in a recent case: subsidiary companies equally require scrutiny. Genuine branches of Hongkong thing
companies/
Import/