1928-12-20 — Page 4

t Your Service

MAN

-very often hard to satisfy,

but always a happy recipient of a thoughtful and useful present.

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THE HONG KONG DAILY PRESS, THURSDAY, DECEMBER ~20th, 1928.

THE PROPOSED ALTERATION OF

STAMP DUTY.

A WIDELY SIGNED PETITION PRESENTED TO THE GOVERNMENT.

BUSINESS MEN EXPLAIN REASONS

FOR THEIR OPPOSITION.

The following petition has been sent to the Colonial Secretary (the Hon. Mr. E, R. Halifax, C.M.G.) to be forwarded to the Officer Administering the Government (the Hon. Mr. W. T. Southors, C.M.G.) protesting against the proposed Stamp Duty on the transfer of shares in local businesses, etc.

A covering letter from Messrs. Lo & Lo, Solicitors, briefly Reviews the position and the nature of the opposition to the proposed legislation.

THE OPPOSITION.

The covering letter is Tows:-

first reading of the said Bill may not be proceeded with and that t be abandoned altogether.

2. That Your Petitioners beg to submit below some of the grounds for entertaining the opinion above expressed.

and Reasons" the object of the Bill 3. That according to the "Objects is two fold:-

(a) To prevent "the evasion of

Estate Duties.

We have the honour to enclose herewith Petition to His Excellency the Officer Administering the Gay- ernment in regard to the Bill to amead the law relating to Stamp Duty, signed by various Bankers, Firros, Associations, Companies, Merchants and Residents.

2 43 some of the signatures may be difficult to make out we enclose herewith a list of the same.

3. The signatures speak for themselves, and we feel it super-contention that there is, in practice, Auous for us to submit any com ments thereon beyond the following brief remarks:-

(a) The managers of all the leading European Banks in the Colony, with the exception of the Hong Kong & Shanghai Banking Corporation, are signatories.

(b) The list comprises practic ally all the leading Chinese Banks, both native and those conducted according to European

methods.

e) The list contains leading Chinese Firms in the Colony including Nam Pak Hong" firms: Kau Pat Hong" firms Californian merchants: Shipping: Imports and Exports: Gold Leat Dealers Universal Providers.

(d) The petitioning Associa- tions include not only the two. Sharebrokers' Associations, but also such representative Chinese institutions A the Twenty- Four" Merchants' Guild (with a membership of over 500 5rms, including 52 of the leading Nam Pak Hong" firms), and Sagar Merchants' Association.

(e) The individual signatories include well-known merchants of the British, French, Spanish, Portuguese, Chinese, Parsee, In- dian, and Japanese communities, and are of a most representative nature.

(b) To prevent the evasion of

Stamp Duties.

4. That before setting out their reasons in support of their respectful

extent as to justify the legislation no evasion in either case to such an

contemplated, and that, even assum- ing, for the sake of argument, the existence of such evasion, the avow- ed object of the Bill will not be achieved by the proposed enactment, Your Petitioners desire to make some preliminary observations upon the more general question of "Blank Transfer which constitutes the raison d'être of the Bill.

5. That as between the Company and a shareholder thereof, the latter remaine a shareholder with all righta, and liabilities as such, unless and until another person has been regis. tered as holder in his stead in the books of the Company.

.'

"Until the instrument of trans- fer is registered the transfer is not complete, the transferor is the legal owner of the shares, and, if they are not fully paid, is liable to pay all the calls made thereon, while his name remains on the register of members." (Halsbury'a Law, of England, Vol. 5., page 102).

Blank Tragster Of Shares,

e. That although this is the posí tion as between the Company and a shareholder, yet, as, between the latter and third parties, he can deal with the shares, which are "mere "choses in action," in the course

4. In your letter of November of everyday business transactions, 30th last, you were good enough to and without registering any instru- intimate that, pending "receipt of the Petition, the Bill would not be ment of transfer with the Company. "further proceeded with, provided resorting to the long established

our representations were

not un practice of Blank Transfer." duly delayed. In strict compliance. 7. That this practice was found- with the spirit of your previso, oured on mercantile convenience; the clients, the promoters of the Peti incidence of fecal imposition, and tion, decided to confine the period the correlated problem of finding within which to obtain signatures legitimate means of avoiding legal to one week, and the Petition was liability for the impost, had noth accordingly closed for signatures ing whatever to do with its genesis as from yesterday.

for its development Its historic

than the

A selected list of the new

Victor Records for December

Here are selections to please every member in the family. Popular theme songs from the feading motion picture productions, Rollick- ing vocal numbers. The latest dance hits played by nationally known

orchestras. Come in and hear them--soon!

INSTRUMENTAL AND VOCAL RECORDS “

Gems from "Aida”—Part 1

Almighty Phtha-Coleste Alda-Come Bind Thy Flowing Tresses-Love Fatal Power On to Victory.

· Gems from "Aida”—Part 2

Glory to Isis My Native Land-But Oh King in Thy Power Transcendent ---- Priests of Isia-Farewell, Oh Earth.

VICTOR LIGHT OPERA COMPANY No. 35940, 12-Inch

Jeannine, I Dream of Lilac Time

(Theme song of the motion picture pro- ductian, Zlind Time) King for a Day Organ JESSE CRAWFORD

- No.- 21681, 16-inch --- Just a Night for Meditation

With Vocal Refrain Roses of Yesterday Organ with Harp

No. 21713, 10-inch

Jesse CRAWFORD

I'm Sorry Sally Instrumental.",

■ I Can't Give You Anything But Love,

Baby! (from Blackbirds of 1928)

SHILAHIT'S RHYTH-MELODISTS No. 21688, 10-inch

Sonny Boy (Theme song of the motion plo».

ture production, The Singing Fool) Organ with Guilor

I Loved You Then As I Love You Now

(Theme song of the motion picture pro.... duction. Our Lancing Daugħieve) Organ with Harp

JESSE CRAWFORLA

No. #1728, 10-inch

The Ham Song—No. 2 (McClintock}~

With Guitar

The Big Rock Candy Mountains

(McClintock) With Guitar

"Mac" (HARGY-MCCLINTOCK) No. 21704, 10-Inch

POPULAR DANCE AND VOCAL RECORDS

HELEN KANE

I Wanna Be Loved By You~~~

(from the musical play, Good Boy) Is There Anything Wrong in That?

No. 21684, 10-inch St. Louis Bluca. The Voice of the Southland

(Keeps Callin' Me Home) GENE AUSTIN

No. 21714, 10-inch

A Gay Caballero

[

5

I Learned About Women From Her

FRANK CRUMTT No. 21735, 10-inch The Land of Going to Be

(from the musical comedy, Paris) Don't Look at Me That Way

(from the musical comedy, Paría)

IRENE BORDONE.

No. 21742, 10-inch

I Loved You Then As I Love You Now

(Theme song of the motion picture pro- duction, Our Dancing Daughters} Sally of My Dreams (Theme song of the

motion picture production, Mather Knows

·Beat)

FRANKLYN BAUB

No. 21734, 10-inch Sonny Boy (Theme song of the motion

picture production, The Singing Fool)

ELLIOTT SHAW Forever

Lewis JAMES

No. 21733, 10-inch Some Sweet Someone-Fox Trot

(from the musical play, Good Boy) With Vocal Refrain

Wanna Be Loved By You-Fox Trot

(from the musical play, Good Bey) With Vocal Refrain THE HICH HATTERS

No. 21682, 10-inch Sonny Boy--Fox Trot (Theme song of the

motion picture production, The Singing Fool) With Vocal Refrain

GEORGE OLBEN AND HIS MUSIC Beggars of Life-Waltz (Theme song of

the motion picture production, Beggars of Life) With Male Quartet ·

THE TROUBADOURS

No. 21683, 10-inch

..

LL

Roses of Yesterday (Berlin) Just a Sweetheart" (Theme song of

Battle of the Sezia)

No. 21700, 10-inch Doin' the Racoon-Fox Trot

With Vocal Chorus

LEWIS-JAMES

GEORGE ÜLBEN AND HIS MUSIC It Goes Like This (That Fanny Melody)

Fox Trot With Vocal Refrain

· JOHNNY JOHNSON AND HIS

ŠTATLEE PENNSYLVANIANS No. 21701, 10-Inch

I Loved You Then Ai Í Löve You Now Waltz (Theme song of the motion picture production, Our Dancing Daughters) With Vocal Refrain THE TROUBADOURS Forever Waltz With Vocal Refrain,

BEN POLLACE AND HIS

PARK CENTRAL ÜRCHESTRA, No. 21716, 10-inch

Where Were You---Where Was I? (Exactly Where We Are)-Fox Trot (from the musical comedy. Billie) With Vocal Refrain George Olsen and Éia Music Right Out of Heaven-Fox Trot

from the musical comedy, Cross My Heart) With Vocal Refrain

THE HIGH HATTELU No. 21727, 10-4ch

Here's That Party Now In Person

Fox Trot With Vood! Refrain NAT SHILERIT AND TER VICTOR ORCHESTRA Come On, Baby!--For Trot

With Vocal Réfrzin

TED WIEMS AND HIS ORCHESTRA. No. 21729, 10-inch

That Old Sweetheart of Mine--Waltz

With Vocal Refrain

DON BESTOR AND HIS ORCHESTRA - If I Lost You-Waltz With Vocal Refrain

JEAN GOLDKETTE-AND-HIS ORCHESTRA

No. 21689, 10-Inch Low Down-Fox Trot Blazin' Fox Trot

THE VIRGINIANE

COON-SANDERS ORCHESTRA No. 21630, 10-ir.ch

S. Moutrie Q Co., Ltd.

5. We are instructed to state origin is synchronous with the that, given the necessary time. liability of shareholders. It has creation of statutory limited Farther signatures to practically An unlimited extent could easily received bigh judicial recognition

11. That the Bill seeks to prevent be obtained.

the English But our clients feel in England, and that the representativeness, rather Revenue Law has made provision any transaction or dealing in shares unless the same is followed by a for its operation. mere quantity, of the

| formal registration with the Com- 8. That after all, this practice, pany; in other words, it seeks to signatures in of importance, and that the signatures obtained within and the judicial and statutory re-abolish the universally recognised such a time, and representing a cognition of its existence are easily and long established practice of they do commercial interests of all understandable. Because the absence Blank Transfer." the communities in the Colonor-prohibition of such a practice:. must bear the most cogent testi- must involve the necessity of resort application for transfer, the regis 12 That upon-the-receipt of an mony to the general feeling of ing to the formal, and cumbersome tering Company bar certain duties opposition to the Bill.

registration of the legal transfer of

to perform in ascertaining that the 6. We are respectfully to express title as a condition, precedent or transfer is valid. our clients earnest hope that the subsequent, to every transaction; order to ascertain whether a trans- And that "in Petition will receive the sympathe with all its consequent delay and fer is valid, and as to whether, when tic consideration of His Excellency.

inconvenience, and this necessity

would at once destroy the funda- there is a discretion to refuse regis 7. We are instructed to enquire mental, nature of shares, and their tration, the transferee ought to be whether the Government has any intrinsic value as marketable securi- registered, the directors must have objection to the publication in the ties readily utilizable to meet busi- Press of the Petition, with a listness and commercial requirements. of the signatories, and a copy of this letter.

We have the honour to be, Sir, Your obedient servants,

(Signed) Lo & Lo.

TEXT OF THE PETITION.

The text of the petition, which is dated December 15th, and addressed

matter. Usually the directors notify to the registered bolder that a transfer has been lodged for regis tration: If the registered holder does not reply to such a notification and a forged transfer is registered, j he is not estopped from having the register rectified by substituting bis name for that of the transferee." (Halsbury's Laws of England, Vol. 3, page 193).

a reasonable time to consider the

Delays In Registration.

[Paragraph:9 cites a number of quotations from legal authorities in support of the position postulated in the preceding three paragrapha

10. That in support of Your Petitioners contention set out above that the English Revenue Law has made provision for the operation of the system of Blank Transfer, Your Petitioners desire to refer to statement contained in Halsbury's Laws of England, Vol. 27, page 245,

13. That, at present, when regis- to his Excellency the Hon. W. T. which is quoted in paragraph 21 (5) tration of träntiers is optional and Southorn, the Officer Administering hereof, to the effect that the not compulsory, the period taken to the Government, reads as follows | transfer, in the case of a purchase perfect a registration varies with (cross-headings having been inserted on a Stock Exchange, contains the different companies from a couple. for convenience in reference):- price payable by the ultimate pur-of days to one week or even longer. That Your Petitioners, bring chaser, and that this price, where It would, Your Petitioners submit, of the opinion that the above men the transaction has passed through be a fair assumption to make that tioned Bill, if it were to become intermediate purchaters, may differ under the new provisions, the num An Ordinance, would profoundly from that to be received by the ber of registrations will increase and prejudically affect the owners transferor. That statement quotes and not decrease, and that the time of shares which are on share the Stamp Act, 1891, section ba (1) taken to perfect a registration will registers kept in the Colony, and governing the amount of Stamp correspondingly be.lengthened and other parties with whom such Duty payable in such cases, which not reduced.

14. That Your Petitioners submit owners may deal in the course of sub-section is as follows commercial and business transac (4) Where a person having that the practical difficulties in the tions, would tend seriously contracted for the purchase of any way of carrying out the provisions

dealings restrict legitimate

"property, but not having obtained of the proposed enactment are too shares, and would constitute an a conveyance thereof, contracts to exhaustively set.out, and they ask numerous and complicated to bu undue interference with well-known -sell the same to any other person leave to state a few hypothetical and vested rights of property, and and the property is in consequence that the said Bill is unnecessary and. unfair, and is detrimental to the best interests of the Colony, humbly pray that Your Excellency may be graciously pleased to direct that the

to ia

conveyed immediately to the sub-case by way of example:- purchaser, the conveyance is to be charged with ad valorem doty in respect of the consideration mov- ing from the sub-purchaser.

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Chater Road.

price, on the understanding that B. was to have, an equit able mortgage on the bares for the loan. How would the transaction be carried out un- der the new provisionsl (2) Suppose, further, that B.,"

month later, has to make a business trip to Canton. Be fore he leaves, he would naturally entrust his markets able securities to the custody of his partner or some respon- sible agent Buppose that, during B's absence, A., for. pressing business reasons, de- sires to sell out the shares. How would A., complete the proposed transaction and ob taba a re-conveyance" from B., who is absent?

!

true owners. How would such shareholders carry out such an " arrangement under the new provisions?

(5) Loans are frequently obtained on the security of partly paid- up shares under the existing practice of blank transfer. when lenders are satisfied with the temporary financial posi tion of the company, and are not themselves subject to any risk of future calls. They would not lend if the shares had to be transferred into their names.

15. That, indeed, Your Petition- ers submit that the manifold and well-nigh insuperable difficulties in the way of compliance with the sug- · (3) In some well-known companies, on the one hand to the time which gested provisions, having regard, the shares of which are re the registering company must neces garded as first-class invest-sarily take, in ascertaining the ment, the directors exercise a | ***

transferor's very strict discretion as to not genuineness of the allowing, more than a certain

signature, in making enquiries from number of shares to be regis risk of frand or forgery, and in the transferor so as to obviate the tered in the name of a person. generally perfecting the transfer, At present anyone wishing to and, on the other hand, to the buy shares in such a company frequency, urgenes, and multipli- but for reasons indicated city of everyday commercial, busi-

ཐ

Evasion Of Evasion Duties.

above, is unable to obtain a registration of such shares inness, and friendly transactions, are his name, adopts the ex-

too obvious to be laboured by Your | Petitioners. pedient of having the shares transferred in the name of trusted nominee who hands 14. That Your Petitioners humb back to such a person the ly suggest that, as regards imposts. scrip together with a blank such as Estate Duties, the possi transfer. How can such ability of their evasion must in- person now invest his money evitably increase in proportion to in such abares?

-(4)-Frequently-shareholder, whoj the degree of what Your Petitioners are desirous of having some bility" possessed by the property may loosely describe as "negotia- one to be on the Board of which it is sought to tax. For in- Directors to represent and look after their interest lendance, Your Petitioners venture to think that there is no property shares to such a uerson to which is more susceptible of evading enable him to have the neces Death Datics than bank notes and sary qualification shares as a

(1) Suppose A wishing to buy some shares, has arranged -with a personal friend, Byte ing

lend him part of the purchase

director. In such cases the Currency, and yet would anyone. usual procedure is for the suggest that the negotiability of hareholders to transfer the bank notes and Currency should be destroyed, or even impaired, for necessary shares into the same the sake of preventing the evasion of the proposed director who handa back the scrips together of Death Duties? with blank transfers to the (Continued on Page 8.)