5.
119
Brenan' s prono sals are that no British company shall
be allowed to operate in China without the consent of
the Ambassador, that as a condition of this consent the
Ambassador may require compliance with the conditions
which are considered requisite for ensuring that the
rights and privileges accorded by our treaties with
China shall be available only to companies of genuinely British nationality, that such compliance must be shown to the satisfaction of the Ambassador, and finally that the requirement as to the Ambassador's licence will be
enforceable by the usual penal clause and the operation of a company without it will be a ground for compulsory
winding up by the Court. The conditions which Sir John
pronoses are clearly explained in his despatch and are
summarised in the second enclosure, therein. The pro-
nosed condition that in the case of private companies
the majority of the shareholders must be British subjects, and the greater part of the capital owned by British
subjects is somewhat of a novelty, but, as Sir John
points out, the shareholding of private companies is al-
ready restricted by law, since the number of members
1e limited to fifty, apart from employees of the company,
and no invitation to subscribe for shares and debentures
may be issued to the public, so the proposal is really
only an extension of an existing limitation.
7.
It will be observed that in paragraph 15 of his
despatch Sir John Brenan points out that if his prono sed
amendment of the Order-in-Council is not to be rendered
/futile