CO129-251 - Acting Governor Barker - 1891 [9-11] — Page 106

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Encoure 2.

C.O

20.14

RECO

Prof 12 007 91,

The Daily Press,

HONGKONG, SEPTEMBER 4rx, 1801.

The petition against the Share Sales Regu- lation Bill was sent home by yesterday's mail. It occupies three columns and contains three arguments, which may be concisely stated in a few lines. The first is that the Bill will interfere with the business in shares traus- acted between Hongkong and other places; the second, that it will be some trouble for a man to look in his ledger or safe to ascer- tain the numbers or marks of the shares he is about to sell; the third, that in the event of the bankruptcy of a seller on time there would be incouventence in adjusting any subsequent transactions that may have taken place in relation to the same shares. There are a number of assertions and denials, ad- vanced with the object of showing that the Bill is unnecessary and that it will not have the effect intended, but the above are the only actual arguments advanced against it. With respect to the first argument, namely, the probability of stoppage of basiness be- tween Hongkong and other places, we will ask how the operation of the Bill can have that result. If it had, people in Hong- kong would then receive the same protection that people in London receive from the Lon don Stock Exchange. Only shares allotted in London are allowed to be dealt with in London. Therein consists the hardship on shareholders in China. London share- holders can realise in China as well as in London, and no restrictions pestail shout [transferring London shares to the China regis- ter. Shares on the China register, unless pre- viously on the London register, are not legal tender in London, while shares on the London register are legal tender in China, and by this much, unfortunately, Mr. KENWICK'S Bill fails to protect shareholders on the China register. If it affords them any men- ¡sure of protection it is in making sales of London shares in China a little more costly, as, to comply with the provisions of the Ordinance, the number of the shares sold would have to be given, and this would cost in telegrams say 84 ou fifty shares, or eight cents a share-or four cents a share on one hundred shares-if the shares were in conse- cutive numbers.

While buyers or sellers of

1 or $7 shares are willing to pay ten cents a share brokerage, or twenty cents on the

Kansaction.

were

transaction, we fear that an additional four or eight cents a share will not stop them. But in selling shares to arrive from London contracts would not pass; there would be no occasion for contracts to pass nn. til the numbers of the shares received by the mail. Mr. KESWICK'S Bill is not aimed at business for the settlement, or even at business forward; it is aimed at the system of forward short selling, over which there is no check such as is provided by the fortnightly settlements of the London Stock Exchange. If a man wanted to sell ja "bear" or buy a "bull" with a near set- tlement impending he would exercise prud-

ence.

Here prudence is cast to the winds because sellers are ready to meet buyera

not for a fortnight, or a mouth, bat for six months or a year. As to the second argument, the inconvenience of looking in the safe to

ascertain the numbers or marks of the shares to be sold, we will not insult the realer's intelligence by entering on the supererogatory task of an- swering it. The third argument, namely, the inconvenience to subsequent dealers in the same parcel of shares in the event of the original seller failing to deliver, is altogether specious. Bankruptcies are fortunately not so frequent that a remote contingency such as that suggested in the petition need be considered a fatal objection to a Bill calen- lated to do so much good as the Share Sales Regulation Bill. Practically, however, the Bill will make little change in the position as regards bankrupts failing to deliver. If such a failure takes place under existing circum- stances the loss has to fall on someone, and it will be the same after the Bill comes into operation. Whatever else may be said in favour of a continuance of the present system it certainly cannot be contended that the system is so excellent that bankruptcies can take place without involving innocent parties in loss.

Looking down the list of signatures we find that the petition is signed by only two out of the seven banks in the Colony under European management, The Chartered Bank and Chartered Mercantile Bank have signed, but the Hongkong and Shanghai Bank, the New Oriental Bank, the National |Bank of China, the Comptoir National

d'Escompte de Paris, and the Bank of China, - Japan, and the Straits are absent from the list. Altogether the signatures number a hundred and fifty odd, of whom some thirty-five are

Or share brokers

share.

brokers

1