CO129-557-9 British protection of companies in China 26-3-1936 - 27-2-1937 — Page 123

9.

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suggesting that in future when such banks contem-

plated the establishment of branches in Chinese

territory, they should be directed to comply with

the Chinese law and apply to the Ministry of Finance

for permission to carry on business. I did not reply

to this memorandum, (a translation of which is enclosed),

nor did I receive any reply to my note.

Eventually

the Hankow creditors themselves apointed a liquidator,

and learning that the Hongkong liquidators concurred

in the appointment, I instructed Mr. Moss to release

the assets to him.

11.

Almost everything connected with the liquida -

tion of these two banks was most irregular according to

British law, yet there was no effective action which we

could take. The cases come very aptly as an example

of the difficulties which the recommendations now put

forward are designed to remedy, and of the fact that

withdrawal of protection while jurisdiction is retained

does not deter such companies from operating but merely

served to aggravate the dangers and embarrassments inherent

in their existence.

12.

His Majesty's Consul-General at Shanghai has

forwarded to me a request from the British Bar Associa-

tion that a draft of any proposed new legislation amend-ing

the terms of the Order-in-Council 1925 relating to the

"substantial control" of China Companies may be furnish-

ed to the Bar Committee for circulation to the members

of the Association in order to obtain their views. I

/ understand