37
local manager of such a public utility company in China to bar Chinese, even though the company wight be mainly British in
character.
12. The latter difficulty is perhaps more likely yo become schte in the case of future companies forced to develop mineral
resources in China,
13. Another class of case is illustrated by the case of the British American Tobacco (China) Limited, which is not Chinese at all but which is partly British in character. The manager of this company is a citizen of the United States of America, and I understand that the company find it difficult, if not impossible,
to displace or replace him.
14. The restrictions imposed by the Thina (Companias) Orders-
in-Council apply only to companies formed under the Companies
vrdimnces of Hongkong, lio such restrictions apply to companies registered in the United Kingdom or Straits Settlements or any other part of His kajesty's dominions. "In the interests of bona fide longkong enterprises, as some of the companies affected appear to be, it se me desirable not be mike this discrimination
unduly stringent.
15. The possible broad affect of the new Ürder must also
be considered. It may be that it will drive a number of companies
off our register altogether. Some may become Chinese companies
and others may become United States companies. I doubt if this
is desirable, though orobably it would be no harm if we got rid
of some companies which have no real comection with either
British territory or British nationality. This latter remark does not apply to companies like the Sincere Company Limited and the British American Tobacco Company (China) Limited, and evon in the case of some purely Chinese companies it might be just as well to have them op our register. For example, a shipping company which was driven off our register would thanafor all its ships to a foreign flag.
16.
I admit that it is difficult to reopen so soon the question of the soundness of legislation which has just been ermoted,
H
and the public appearance of so sudden a volte face cannot be disregarded entirely, but in the absence of any clear evidence of necessity for the new provisions referred to I venture to sugest that their usefulnean is outweightủ by
their drawbacks.
17. It may be that a way might be found out of the difficulty by taking power for the issue of licences by you empting meroved companies from the operation of particular articles of the Chins (Companies) Order-in-Council. If this pronosal were adopted the discretion of course would be yours, but I feel sure that you would be prepared before-band to discuss generally its mplication to bona fide Hongkong enter-
prison.
18. I shall be mush obliged for Your Excellency's views on the subject, and I would ngmin suggest that no sction should of be taken under Articles 3 or 4 the 1919 Order until the matter has been fully discussed between all the authorities concerned
or interested.
I have the honour to be,
Sir.
Your Excellency's most obedient servant,
(ad.) B.E. Stubbs.
Governor, &c.
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