CO129-375 - Governor Sir Lugard - 1911 [1-2] — Page 339

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of answering the claim in Shanghai, or in one of the Provincial Courts. I have already referred to the position of such Companies in winding-- -up matters.

330

I ought to refer to Mr. Bourne's views. His main objection to such a scheme as that now under discussion is the introduction of something that is not English law into our system in China, but such a principle has already been set at defiance in Zanzibar and East Africa, where many Indian Acts, which are in con- -sonance with the principles of English law, apply without any detriment to the administration of justice. And a further answer is that Hongkong Law so long as it follows the English Act, will merely alter it for adaption to circumstances which are more likely to prevail in China than in England.

The first question, I have the honour to submit, is to determine which system is to be adopted. (1) The English Act with or without a registry in Shanghai. (2) The Hongkong Ordinance, with the fiction, that the home of the Company is China, legalized by Order in Council.

With the first proposal I have already fully dealt in this memorandum and in my last despatch, but I wish to add one or two remarks as to the second. If it is adopted the provisions of the Order in Council will require careful consideration. The first desidera- -tum is to ensure a register such as that kept in England under section 274 of the Companies Act, so that the Imperial Authorities should know what Hongkong and other British Companies are carrying on business in China, who are their directors and shareholders, and what is their

position. I think such a register could be kept by the Registrar of the Supreme Court, his extra salary would have to fall on the exchequer

which draws the revenues from the Companies. It will clearly have to be kept by someone with a practical knowledge of law, and at Shanghai. By

this register we should know what British Companies carry on business

in China, their domicile and composition. To complete this part of the scheme I would suggest that a company registered in the United Kingdom

and carrying on business in Chine should be entitled to keep a Colonial Register under Sectiores 34-36 of the Companie's Colonial Act duty for the transfer of snares in that register being

payable