CO129-431 - Governor Sir May - 1916 [1-2] — Page 472

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From the foregoing it will be seen that my Committee do not feel that they can recommend the Members of this Branch to forge their legal rights, but they consider that having this valued expression of opinion of His Majesty's Minister should be suflicient for each merchant to act according to his own judgment and discretion.

Sir E. D. H. Fraser, K.C.M.G.,

H.M. Consul-General,

I have, etc.

H. A. J. MACRAY,

Vice-Chairman,

China Association, to Foreign Office.

China Association,

99, Cannon Street, E.C.,

1st February, 1915.

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Germany being held to be "Agents," it would appear that German firma in China which have no head office in Germany are in a preferential position as compared with the firms which are held to be Agents.

My Committee are of opinion that the present position of this question is unsatis- factory, as it is left to the discretion and patriotism of individual British merchants either to enter into transactions with, at any rate, some "enemy" firms, or to forego their legal rights and eschew all transactions with the enemy. In view of the expression of opinion of His Majesty's Government that such transactions are undesirable, the latter course will no doubt be acted upon in the majority of cases, but my Committee consider that it would be preferable if all transactions with all " subjects in China daring the war were formally prohibited. It would, however, be necessary that effective co-operation on exactly the same lines should be secured on the part of our French, Japanese, and Russian Allies.

enemy

I have, &c.,

H.M. Under Secretary of State

(Signed) F. ANDERSON,

for Foreign Affairs,

Chairman.

Foreign Office, Downing Street.

!

SIR,

The Committee of this Association have had under further consideration the position of British subjects in relation to trading with the enemy.

I have the honour to enclose copy of a Memorandum on this subject, from which it would appear that transactions between British subjects in the United Kingdom and in China, and subjects of the enemy in China are legally permissible, although the Board of Trade Notice of 31st December states that, in the opinion of His Majesty's Government, such transactions are undesirable.

It is, however, clearly laid down that it is illegal for British subjects to enter into transactions with any person or body of persons resident or carrying on business in "enemy

countries, or with the Agents in China of any such person or body of persons, if the transaction is in effect one with the head office.

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The principal German firms in China are undoubtedly branches of their head offices in Germany; there is little doubt that the main portion of their capital is derived from Germany, and that their trading profits are, to a great extent, for account of those head ffices, so that it may be said that all transactions entered into by them are transactions "in effect with their head offices" and are therefore prohibited,

In the Notice issued by the Board of Trade on the 31st December, it is, however, definitely stated that transactions between British traders in the United Kingdom and in China with " enemy" firms commercially domiciled in China are not expressly prohibited.

In the event of branches of German firms whose head offices are in

Board of Trade (Commercial Intelligence Department) to China Association, London.

Commercial Intelligence Branch, Board of Trade,

SIR,

73, Basinghall Street, London, E.C.

2nd January, 1915.

Permit me to call your attention to the Notice (copy enclosed) which appeared on page 891 of the Board of Trade Journal for 31st December, regarding Commercial Relations with Enemy Traders in China.

I am, &e,

THOS. WORTHINGTON,

Director.

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