CO129-431 - Governor Sir May - 1916 [1-2] — Page 467

62

China, and who should have their headquarters at Tientsin, Shanghai, and Canton, These officers might be expected to keep in touch with British merchants throughout their respective districts. The suggestion of our Tientsin Branch that the Commercial Attaché should be supplied with a Chinese subordinate is also worthy of consideration, for the reasons given in their letter.

My Committee are naturally diffident in offering suggestions regarding the selection of men for the new posts, but they are strongly of opinion that there are two qualifications which are indispensable: a thorough knowledge of the language and some experience of commercial affairs.

It is recognised that these suggestions will involve some additional expense, but probably not to the same extent as that already incurred by our competitors in China, who, presumably, have found that expenditure in obtaining commercial intelligence in China has been directly and indirectly remunerative. The present time seems to my Committee to be a favourable opportunity for inaugurating the changes suggested, in view of the movement now proceeding throughout the United Kingdom to attract into British channels branches of commerce and industry in which our rivals have acquired so large a share.

I have, &c.,

H.M. Under Secretary of Stato

for Foreign Affairs,

(Signed) F. ANDERSON,

Chairman.

TRADING WITH THE ENEMY,

MEMORANDUM BY THE CHAIRMAN.

With reference to correspondence in connection with the question of Trading with the Enemy, and recent legislation on the subject, there appears to be some conflict of Authority.

The line taken by the Consul General at Shanghai regarding this Bill is not the same as that taken by the Foreign Office. The Board of Trade have from time to time pointed out to the Association that German trade in China seemed to be progressing more rapidly than British-they have recently been actively supporting a movement to capture German trade whilst we are at war, yet this Bill, as explained by the Foreign Office, so far from placing any obstacles in the way of German trade in China offers every facility for Germans residing at Treaty ports to carry on the business there, both in imports and exports. At the same time Germans have been expelled from Hong Kong and Singapore-their business at these ports being thrown into liquidation. There can be little doubt that it is a tangible gain to the enemy" if German firms, whose head offices are in Germany, are enabled to carry on their business in China, and to remit their profits to Germany through Neutral countries.

The following is a synopsis of the correspondence:

Shanghai Branch to Consul General

The Shanghai branch asked for information on the following two points:

(a) Does the fact that China is a neutral country entitle British subjects residing and doing business in China to claim a neutral commercial domicile ?

(b) If such a neutral commercial domicile cannot in the circumstances be claimed, what business, if any (other than covering war risk and dealing in

464