CO129-411 - Governor Sir May - 1914 [5-7] — Page 387

Ne CONFIDENTIAL.

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382

REC

25197

REG2 10 JUL 14

GOVERNMENT HOUSE.

HONGKONG. 16th. June, 1914.

70.

124

sir,

23

With reference to your Confidential Despatch of

the 15th. April covering correspondence on the proposed enactment ir

China of legislation similar to the Hongkong Ordinance llo. 5 of

1891, I have the honour to report that enquiries made of the local BT Commercial Community do not bear out the objections raised by the 1087

Board of Trade in their letter of the 23rd. of March. From these

enquiries it appears that when the seller lives in London or else-

-where at a distance the numbers of the shares are in practice not

inserted in the contract. The effect of the Hongkong Ordinance is te

make brokers refrain from entering into such contracts with clients

of doubtful stability, but it does not prevent a free market in

shares. There is in fact a considerable business in buying and sell-

-ing of shares between Hongkong and London.

In practice it has not been found that the

Ordinance has conduced to the undue inflation of the prices of

shares and their subsequent unloading on the public. No law will prevent people from being induced to buy shares at inflated prices, but the existing law is a check on their buying beyond their means.

ER

I have the honour to be,

Sir,

Your most obedient, humble servant,

may

Governor,&c..

HE RIGHT HONOURABLE

LEWIS HARCOURT, M.P.,

&C..

LC •

&c...