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commission with details of the accounts. It is in consequence of these attempts to bring the British claims within the scope of the commission that the four firms have now clearly defined their attitude to the whole question. The impression prevailing among the British mercantile community, which I share, is that the commission has been forced upon the Chinese authorities by the importunity of the consuls of Germany, France, and Japan, and that its probable results will be most unsatisfactory. The Chinese have from the commencement of negotiations in connection with the crisis advocated delay and the redemption of debts by long-continued annual instal- ments. They have deprecated any severe measure such as bankruptcy as likely to cause a financial panic. The commission supplies them with the machinery for almost unending procrastination. The idea of a Government loan or advance to the defaulting firm is regarded as entirely illusory.
The Chinese authorities in addition welcome as usual any opportunity of playing off one Power against another, and are no doubt gratified by the divergence of views as to the proper method of dealing with the question.
I have, &c.
Sir,
Inclosure 2 in No. 1.
H. E. FULFORD.
Joint Communication addressed to Consul-General Fulford.
Tien-tsin, August 11, 1909. WE, the undersigned British firms, venture to call your attention to our claims against Chinese firms and the apparent impossibility of making any headway with these claims in the Chinese court. Correspondence between your consulate, the Customs taotai, and the Shen P'an Ting has been endless, and we take this opportunity of thanking you for the forcible way in which you have brought our claims to the notice of the Chinese authorities, but as far as any practical result is concerned, we fear that our claims are no nearer settlement than when they were first handed to the Chinese authorities. This is entirely due, in our opinion, to procrastination on the part of the Chinese authorities, who are not making any serious attempt to bring pressure to bear on the defaulting native firms.
In all our dealings with these firms, we have rigidly carried out our contracts, and perhaps it would be as well to remind the Chinese that these contracts are mutual and involve obligations on their part as well as on ours. In making importations on behalf of the Chinese we undertake serious responsibilities, and these responsibilities are no less binding on us because the Chinese wish to evade their part of the contract. Moreover, they are fully aware that in making contracts with us they have the protection of the English law to ensure that we shall act up to our obligations, and all we ask now is similar protection from the Chinese legal authorities.
When a foreign firm fails, unless some arrangements are made with the full consent of all the creditors, that firm becomes bankrupt and its assets are realised and distributed proportionately amongst the creditors. There are instances of this actually occurring in Tien-tsin at the present time, and as there appears to be no proper Chinese law of bankruptcy, we think we have the right to insist that Chinese firms against which we have claims should be dealt with in the same way as we should have been if we had failed to carry out our contracts with them. In this connection it may be as well to enumerate article 7 of the Anglo-Chinese treaty of 1858:-
"A British subject having reason to complain of a Chinese must proceed to the consulate and state his grievance. The consul will enquire into the merits of his case, and do his utmost to arrange it amicably. In like manner, if a Chinese has reason to complain of a British subject, the consul shall no less listen to his com- plaint, and endeavour to settle it in a friendly manner. If disputes take place of such a nature that the consul cannot arrange them amicably, then he shall request the assistance of the Chinese authorities, that they may together examine into the merits of the case, and decide it equitably."
To a certain extent this procedure has been adopted in cases which have been tried by the Shen P'an Ting, but, as we have said before, without any practical We need not dwell upon the various cases which have been tried by the
result.
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Chinese judicial authorities, nor need we refer to the delays and postponements that have occurred, and even when judgment has been obtained, the failure to give effect to that judgment. Suffice it to say that we have tried to get justice and
failed.
We now ask that the matter be referred to a higher authority. The Customs Taotai has proved himself incompetent or at any rate unable to deal with the situation. The Shen Pan Ting, with the native Chamber of Commerce acting as its guide, philosopher and friend, has been worse than useless. We therefore suggest that the whole question be taken without further delay to the Viceroy, and we would like it to be made clear that we do not ask for any favours or preferential treatment--- but simple justice. We maintain that if a Chinese firm has failed (and all those against which we have clainis are in this position), that firm should be declared bankrupt, and its assets distributed proportionately amongst the creditors. The Chinese can insist on this being done-if they wish to--and we request that you will approach the Viceroy and ask him to give instructions to this effect.
If no satisfaction is obtained from the Viceroy within a reasonable time, we further request that the question be referred to a still higher sphere, viz., His Britannic Majesty's Minister in Peking, and that he be requested to insist that the Wai-wu Pu does something for the protection of our interests in terms of the Anglo- Chinese Treaty of 1858, a clause of which we have already quoted.
In conclusion we would like to refer to the recently-instituted committee known as the relief commission.
We understand that this commission is being fostered by German firms and backed by French and Japanese firms with the object of raising money to enable Chinese firms to tide over their difficulties, and incidentally to discharge their obligations to the aforesaid foreign firms. The object at first sight seems a landable one, but we believe it is a fact that the better-class Chinese firms have not asked for and do not require relief. The native firms, which hope to benefit by this relief commission, are without exception firms of no standing whatever, whose business has only been possible by means of the credit system of dealing with foreign firms, which, owing to its abuse, has been made such a curse to the trade of this port.
The more we hear of this relief commission the more clear it becomes that the primary object of its existence is to give relief to those foreign firms which have so largely overtraded with the Chinese, and in consequence now find themselves in difficulties.
We therefore wish to dissociate ourselves entirely from this relief commission and to request that it is in no way allowed to interfere with the prompt settlement of our claims against Chinese firms. If necessary, protests should be made to the German, French, and Japanese Ministers against the course of justice being delayed by this relief commission. If the commission thinks it is to the interests of trade to keep alive these bankrupt native firms, they should first buy out the British firms, and as we understand that the total British claims are not likely to exceed 250,000 taels approximately out of an estimated total among all foreign firms of 14,000,000 taels, there should be no difficulty, if the relief commission is worth anything at all, in raising such a comparatively small sum as would satisfy the British creditors.
The business morality of the Chinese until recently has been of a high standard, and we think it is a pity that they should lose their character for integrity and honesty for the sake of a few worthless Chinese firms which have been trading dishonestly on the credit obtained from foreign firms. In our opinion it is not to the interests of the Chinese import trade to bolster up these rotten native firms. better that they should be weeded out, and clear the way for a good honest trade, which we may naturally assume will spring up as soon as the present crisis has been faced and a settlement effected, but not until then.
Thanking you to give our views your usual careful consideration, we are, &c.
Far
WILLIAM FORBES AND Co. COLLINS AND Co. MACKENZIE AND CO. (Limited). F. R. SCOTT, Manager. (Per pro. Perrin, Cooper, and Co.),
W. H. WAMSLEY,
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