5
2. In 1900 I was appointed Official Liquidator of the China Line of Steamers, Limited. It consisted of 11 shareholders only, viz. :-
1 European firm.
1 Portuguese at Macao.
7 Chinese giving Hongkong addresses.
2 Chinese giving Canton addresses.
All of whom were placed on the list of contributories.
3. I did not succeed in obtaining any calls from any of the Chinese, they could not be found at their Hongkong addresses and the notices posted to Canton were returned to me. The only contributory therefore within the jurisdiction was the European firm which was almost ruined by the calls made upon it.
4. At present I am liquidating the Sam Yee Co., Ltd. It consists of 109 Chinese shareholders, of these, I have not included 18 on the list of proposed cou- tributories as I am fully satisfied that they have paid in full.
5. The list of proposed contributories at present is 91, of which, 49 reside in China and one in Japan.
6. My Solicitors have nude every endeavour to serve notices on the 49 who reside at Canton and the district round, by sending special messengers, but the shareholders can either not be found at the addresses given or even when they are presumably found they deny their personality and will not take service.
7. But assuming the whole 91 were placed on the list of contributories, from past experience I have not the faintest hope of obtaining anything from the Chinese contributories out of the jurisdiction, and very little from those within, who can so easily get beyond the reach of the Court.
8. As this Company's liabilities amount to $400,000, this example appears to be a grave indictment against limited liability companies of exclusively Chinese nationality-many of whom are resident beyond the jurisdiction--and with respect I venture to make the following alternative suggestions :------
(1) Either that the Company Law be amended in this Colony by only
allowing Chinese to register Companies that are fully paid up;
or,
(2) Greater facilities in China be given for enforcing the processes of this Court when limited liability companies are in liquidation and in the hands of an Official Liquidator, for generally speaking the Chinese accept all the profits but none of the risks incidental to Company undertakings and ventures, thus being placed on a better footing than our own British subjects.
9. Suggestion (1) though safe is rather arbitrary and would probably restrict enterprise, while I think suggestion (2) is better, particularly if the amount debited to the Chinese contributory could be entered up as a formal judgment and proceedings taken thereunder similar to those contemplated under Article 23 of the Tientsin Treaty.
Enclosure 3 în No. 1.
J. W. LEE JONES.
MEMORANDUM BY THE OFFICIAL RECEIVER.
Official Receiver's Office, Hongkong, 29th June, 1905.
Six-I have the honour, as requested by yon, to report as to the difficulty experienced by the Official Receiver in Hongkong in connection with the recovery of property in China belonging to Bankrupts.
Bankruptcy administration in Hongkong is particularly difficult owing to the system under which the Chinese trade. Every Chinese business is carried on in a firm or hong name, and the names of the partners are usually unknown to out- siders, each partner putting in a certain sum as capital, and they appear to consider their liability is limited to that amount, one of the partners is usually constituted manager and the rest taking no active interest in the business and reside in Hong-
kong or Chinu. absconds, the partnership book or agreement and other principal documents being almost invariably missing, and although it is well known that many rich and influential men both in Hongkong and China invest their money in businesses in Hongkong it is impossible, owing to their names being kept secret, to take proceedings against the persons who are legally responsible.
When the business fails the manager in very many cases
It is also the custom of the Chinese merchants and traders to have their landed property frequently put into the names of friends and relations and it is thus generally impossible when they become bankrupt to prove that the property
is theirs.
In cases when the debtor has property in China and it is known where such property is, it is usual to apply to the Viceroy through the British Consul to have such property attached, but every difficulty appears to be thrown on the way by the Chinese Officials and it is only after considerable pressure that any result can be obtained; in a recent case when a debtor was bankrupt with property worth over $2,000 in China, only $250 could be obtained after many months of waiting and very considerable pressure on the Chinese Authorities.
In an interview I had at Canton in 1903 with Mr. JAMES SCOTT, the present Consul, where an absconding debtor had considerable property in China which had been attached by the Chinese Authorities through the German Consul on behalf of a German firm in Hongkong, Mr. Scorr informed me that he could not interfere in the matter or assist the Official Receiver in Hongkong in any way in recovering the property for the benefit of the creditors generally, but that in the event of any of the creditors being British subjects coming to him personally he would arrange with the German Consul to have the property which had been attached divided amongst the creditors who had been to them, it is in such cases that gross injustice is likely to be done to the general body of creditors. From what I can hear it appears that German firms in Hongkong and Canton have greater facilities given them for attaching debtors' property in China than can be obtained by the British Government or British subjects, through their own Consul.
In a very recent case I was informed by the British Consul, when requesting that certain property in China belonging to an absconding debtor be assigned to my nominee in order that he might realize such property satisfactory for the bene- fit of the estate, that the Chinese Authorities alone were competent to realize the
presune this estate and that my application could not be granted and if as I tice is to be adhered to the probability is that only a small sum will be realized owing to the dilatory and unsatisfactory way in which Chinese Official business is carried out.
prac-
Until some system can be devised by which the Chinese Authorities can be brought by the British Government to recognise their responsibility under Articles XXII and XXIII of the Tientsin Treaty, I fear that little can be done in the way of recovering property in China for the benefit of debtors' estate.
I have &c.,
His Honour
THE CHIEF JUSTICE.
Enclosure 4 in No. 1.
G. H. WAKEMAN.
LETTER FROM MR. C. D. WILKINSON.
Hongkong, 15th June, 1905.
DEAR MR. LEE-JONES,-With reference to the question mentioned by the Chief Justice in Chambers on Friday last as to the enforcing of judgments obtained in our Court bere against Chinese debtors who have absconded to Canton, I have, during the last 19 years, had frequent occasion to make application to the British Consul in Canton for his assistance under Article 23 of the Treaty of Tientsin. Some of the predecessors in office of the present Consul have considered it their duty attention to such applications, whether made on behalf of British subjects or Chinese so long as they were made on behalf of persons residing and carrying
to
pay
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