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Hon, T. H. WHITEHEAD-As an amendment, sir, 1 rise to move that this Bill be real this day three months This Bill was introduced on the 21st July, 1890. The first reading was seconded by the hon. member who is now absent from the Colony on leave as no other unofficial member was present and as he was desirous that the subject should be thoroughly discussed and threshed out though he was opposed to the principle of the Bill. At the first reading the then Attorney General is reported to have said :-
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There is no doubt that this Bill will require very serious consideration, for it is well known that there is in this colony a very large busi- uess done in the selling and purchasing of shares on what is known as fine bargains. Up to the present moment these bran810- tions have been looked upon as perfect- "ly legal and have been recognised by the Courts of Justico. The effect of the Bill "would be to a great extent to stop these transactions or at least to rendor them very "nacertaiu indeed, as such contracts are declar "ed void. One of the questions which therefore "may be asked is whether this measure is not too stringent, for notwithstanding abuses which have taken place, there has been a very large amonat of these transactions which are perfectly legal. When two pr "sons have come to an agreement with res- "pect to shares, and when they are both able to carry out their contracts, when the time comos for the parchase, is the legislatura to step in and stop the effect of it because matters have not turned out favourable to one of the "parties? Ag in, will this Ordinance have the *effect of stopping such business ? If this measure is contrary to public opinion or in ad- vance of public opinion, we may see the specta "cle of the legislature having passed a law "which is being openly violated every day, and "I think that would have a very demoralising "effect."
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Now, sir, I do not baliove, if passed, that this Ordinance will have the effect of remedying the evil which exists, and therefore on that ground I am opposed to it. If au effective remedy can be found, lowerer, and if the opportunity offers, I shall be only too glad to come here and support it. The Chamber of Commerce at the general meeting held on the 18th of last wonth, specially called at the instance of the hon. mem- For the mover of this Bill, condemned the Bill by a large majority. Every member of the com- mittes of the Chamber of Commerce with the exception of the hou. member the mover of the Bill voted against it. The senior unofficial mem- her refrained from voting altogether. After the adverse decision of the Chamber of Com- merce it may be considered perhaps expedient to postpone the Bill in its present form until public opinion is more rearly educated up to it. It seems that a copy of the Bill and the "memo. randum from the Attorney-General dated 25th August last were sent forward to the Secretary of State for the Colonies. The second paragraph of the memorandum states that "two or three large operators and moneyed men it they sell for a future date cau no doubt in Hongkong rule the market." He thon goes on to say that the pro- perty of bona fide shareholders is, thus lowered and bona fide shareholdere ace prejudina). This is alwala mester of aplalon and I de sat meng with it. In the third paragraph the learned Attorney-General refers to the fact that many young men have been ruined by speculation in gharos. Surely this is not a mattor for Jegislation by this Council but rather a ques- tion for moral quasion. If the beads of bonses and offices strictly insisted, as I believe some do and as I believe the Government also do, on stopping their employees from engaging in share transactions, we should not have to be reminded of the ruin of so many young meu. I fear that many young men have follow- ed the example of these in higher positions, who have suggested such # course by their actions. I believo I am correct in stat- ing that the Government do not permit their employees to speculate in shares. We see the effect of this in the fact that the person- nel are in no way involved in the rain which has fallen ou a certain section of the community. Surely if we were to adopt similar restrictions a liks result would follow, but if we in the same office are spoculating in a reckless way we can hardly expect those nader us to keep
clear from the infection. Further, the At torney-General says this Bill will not interfere with legitimate business or speculation and he refers to cortain cases of embezzlement by clerks which have come under his notice at the Criminal Sessions and which he says had their origin in excessive and rash speculation in I shares. I believe that the public gambling which is tolerated in Kowloon City is far more responsible for these unfortunate events that have happened than any speculation in shares, or at all events the two have gone haud iu hand. In the last paragraph but one the Attorney-General refers to what has come un- der his notios as Official Assignee. I maintain that to limit time contracts to one month or even two months would have a far better effect and be far more likely to eradicate the evil complained of than this Bill will. In the letter which I ad- dressed to your Excellency while this Bill was in committee I gave certain illustrations which I think show very clearly that should this Bill pass into law very great hardship and very great injustice would result to perfectly: iunocent men. For instance, on the 1st July Anderson sells 100 Dock shares and gives the numbers, say 400 to 499, to Brown for 25th September. Brown sells the same 100 Docks to Campbell for 25th September, Campbell sells the same 100 Dooks to Dickson for 25th September, Dickson solls same 100 docks to Evans for 25th September, Evans sells came 100 Docks to Fraser for 25th September, Fraser sells same 100 Docks to Graham, and so on. Such transactious are constantly taking place. All goes well until the beginning of August, when Brown through un- foreseen causes gets into difficulties and his financial position becomes critical or he absconds. Anderson is aware of the altered position, but having sold a particular 100 Docks and given numbers he cannot do anything to protect himself should the market be going agaiust him. He has to wait patiently until 244 | September, on which date Brown fails to fulfil his part of the contract and tako delivery of the shares. If loss rosults Anderson has to suffer and claim on Brown's estate. Campbell cannot get deliver of the identical 100 Docks ho bought, and he cannot legally tender any other 100 Docks to Dickson. Dickson cannot delivery
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to Evans. Evans cannot deliver to Fraser, nor Fraser to Graham. What is the result? Great inconvenience, porhaps injustice, litigation, and serious loss to perfectly innocent men through no fault of their own. In the above ense, admit- iting that all goes well, it is, I think, most impro- bable that delivery could be obtained of the identical 100 shares and that they could be again tendered in fulfilment of the tracts on the contract date, 25th September. Time would not permit, and if the identical shares were not tendered on the contract date! the contract would become void. The care persons as above mentioned enter into a contract with each other early in July for 100 Steam. boat shares, delivery 15th Soptember. Through some cause Anderson's account with his bankers gets out of order. His 100 Bots are pledged to the Bank, the Bank bag full control over them and power to sell if the margin is not main- tained. The margin is not forthcoming and the Bank sells the shares for cash and credits Anderson's account with the proceeds. Brown, Campbell and the other: are whable to fulfil their contracts through Auderson's failure to deliver, the Bauk for its own protection having quite legally and within its right sold Auderson's iden- tical 100 shares for cash. The result of Anderson's failure to deliver to Brown renders Brown no- Lible to deliver to Campbell, and so on and the others are prevented from fulfilling their con- tracts and the result may be great injustice' great hardship, litigation, and possible serions loss to innocent man. Anderson may sell 100 shares in a Buuk, a Steamboat Company, a Rope Company or any other Company and give the numbers. He owns the shares, he has paid for them, but the scrip still stands in the name of, say Smith. Through some accident to Smith the Bank Company in question declares the said shares forfeited, the Bank or Company having a prior lien upon the shares. Those identical shares have changed hunds several times after Anderson sold them. Anderson being prevented from delivering all the others intarosted mast suffer though perfectly innocent men. In the case of the death of a larga share operator there must be delay in the fulfilment of contracts,
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