CO129-462 - Governor Sir Stubbs - 1920 [7-10] — Page 108

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careful and sympathetic consideration, and you provisionally approved of the same by your letter to the Company here of the

12th April last.

Later Sir Arthur Churchman, who had already been

appointed Managing Director here of the 'China Company' so as to comply with Article 4(1) of the new Order-in-Council of 1919,

informed you that the Board of the home company found difficulty in agreeing with the suggestion to transfer the control of the

Company's interests in the East to Hongkong.

After consultation with myself, you told Sir Arthur

Churchmen that, as you considered the granting of exempting

licences would in fact invalidate the Order-in-Council of 1919,

you personally would prefer that if any change in the interests

of the British American Tobacco Co.Ltd. were made, it should be by

way of an Order-in-Council frankly exempting that Company from

the restrictions of the 1919 Order.

Even if the proposed transfer of control to Hongkong, and of the Company to the Hongkong Register, cannot be arranged,

the reasons which have led me to advise against the giving of a

power to H.M.Minister to grant licences of exemption from the

provisions of Articles 3 and 4 of the new Order-in-Council of

1919 hold good and may be re-stated as follows:-

1.

2.

The transfer of all China Companies heretofore

under non-British control to British control has been

practically completed (the only outstanding case of

any importance being that of the British American

Tobacco Co.,Ltd.).

If licences allowing non-British management of

Chine Companies were under any circumstances obtain-.

able, a most invidious and difficult task would be set

H.M.Minister, and the Registrar and also the Crown

Advocate as his technical adviser in such matters.

If such licences were obtainable, the force and

effect of salutary provisions, the need of which has

been felt for years, would be seriously weakened.

4.