'Mr.' J. ©: Hanson in' opening the case said—I have taken the opportunity of having the address which I proposed to make written out and translated into Chinese, which I will hand to the Tsotai, so that he can follow my remarks as I yo along.
Mr, Jernigan—It would perhaps be as wall, Mr. Hanson, if you were to read the Gocuments you propose to introduce. Then tition and answer and let us know what
we should Know what was before the Court.
Mr. Hanson—The Court knows that pretty wall already.
Mr, Jérnigan—I have no objection to dispensing with the reading of the, petition and answer if the Court agrees to it. But T should like to know what documents you propose to pit in. as evidence because it tay be necessary for me to make a motion. "tte. Hanson—I am entitled to put in what documents I think necessary.
Mr. Jernigan—To make my meaning clearer, I suppose for one you would want to offer the Act of Incorporation as evidence Mr. Hanson—You will seo from my opening remarks what documents are necessary.
'The petitions' and answers were then read on the suggestion of the Court.
ing letter from Tu Tso-lun formerly "Mixed Court magistrate, dated 21st December, 1896, to Mr. J. Scott, Vice-Consul was then read by Mr. Hanson Deak Sm,—Lsst day I duly received your letter regarding the claims of the Bank of Chins, Japan and the Straits, Limited;.and: Chiness Merchants, for payment of unpaid calls on their shares. You wrote that having received no reply to your; request that orders be issued enforcing payment, you now propose to set the cage down for hearing by the Court, on the forenoon of the 2rd instant, und desired mo to summon Wei Poo-kee and Woo Chee-dong to attend accordingly and have the claim regularly heard. I beg to inform you'that on receipt of your first on the subject, I duly notified the defendants and communicated with you to that effect. Having received your present letter, I again notified defendants: and now Wei Poo-kee and Woo. Chee-dong have lodged the following answer "Both Chinese and Foreigners are shareholders in this Bank and all are agreed in refusing to pay up any calls. It is: well-known that a citizen of the United States brought his case before his Consular Authority and the decision of the Court traversed the whole facts and evid-and it is most clear and explicit.
jinese shareholders on their part likewise applied to the Taotai to communicate with the Ministers Superintendent of Trade for the North and South. Chinese shareholders not only refused to pay up any calls, hut desirer to have claim made-on the Bank for the refund of their capital, because as originally constituted the Bank was strictly limited to mortgage business, but afterwards, without informing; the Chinese shareholders, illegally alter its regulations and engaged in exchange transactions which were little better than gambling: speculations in the rise and fall of silver. In thus'improperly altering its regulations, engaging in reckless business at its own pleasure, and then calling for more capital from its shareholders the conduct. of the Bank was contrary to every principle of trade.
"Tu consequence the Chinese. shareholders applied to the Taotai to obtain the return of their capital. In reply the Pwotai issued a rescript declaring that the Chinese themselves were in fault according tothe Tsungli Yamen. the Treaty contained no provision for the investment of capital by Chinese and Foreigners on joint account as shereholders in commercial undertakings. Under these circumstances, the Taotai was not in position to entertain any request for thi recovery of their capital; while as regards the Bank's claim for the payment of further calls, the Taotai was also unable to entertain' any application by the Bank. This rescript is on file in every yamen where it can be seen and. produced in evidence. Further, the Bank's shares are held not only by Chinese but by-Foreigners of every nationality. If one pays up let all pay up; if one be exempt, let all be exempt. 'We feel that Vice-Consul Scott, who has long been resident in Shanghai' must assuredly with his clear discernment, be fully cognisant of the outs' and ins.of this' important cise. Besides, the decision already given in the United States Consular Court.is just in every way; and we humbly. pray that enquiries be "addressed to the, United States Consul whether such calls should be paid or not." The whole case can thus be easily understood. Finally, not only has the Bank lost all its capital but it has long ago altered its style and title to The Bank of China and Japan, Limited (Pao Shing instead of Hui Tung) &c., &0."
The above anniver has been duly received from the Defendants: and I now beg to inform you that I ai not in a. position to summon them into Court and recover the sums (claimed by the Bank) and address this letter to you accordingly.
Compliments and card of (Sd.) To Tso-Luw, Mixed Court magistrate, Translated by (Sa,) 3. Scorr.
Mr. Hanson also read, the following letter from Liu Taotai to,, Sir. Nicholas Hannen (then Consul-General) dated. the 16th of March, 1897 a <I have the honour to acknowledge March, of your despatch dated the Ist of asking me to appoint a day hear the case arising out of the claims of the Bank of China, Japan and- the Straits r. Wei Poo-che and Tang Jui-ho shareholders in the said Bank. With regard to this matter, I bey to state as follows When acting Taotai here in July 1895,>T received a petition from eighteen Chinese gentlemen headed by Li Kuan-chih and Ma Chi-chang stating ~that..they:: had jointly invested in Bank of China-shares to the number wf 80,000 representing: a sum of over Tls. 500,000. - Afterwards the Directors of the said Bank without preliminary notice or calling a-meeting shareholders to discuss matters took upon themselves to order a call of £1 sterling on every share and this at atime when the rate of exchange was subject to extreme fluctuations and the share market was in consequence in a most critical condition. Moreover owing to the Bunk Directors' irregular and unsound method of doing business these shares had fallen to nothing at all. Petitioners repeatedly begged the Directors to cease making calls on; the shares but in spite of this they issued. notices calling for a further in addition to the £1 per share alread, evidently with the intention of swindling us. Last summer, Petitioners went on to so; Bank Directors brought an action: a an American shareholder to force him to pay a call. The American Consul before whom the case -was heard publicly stated that the Bank having engaged in exchange business which did not properly come within their sphere of operations had thereby transgressed the terms of: their original constitution, and the Consul accordingly refused to call upon the defendant to pay anything on -his-shares and further Directors by departing from their constitu. laced it upon record that the Bank
tion had broken faith with their shareholders. It thus became notorious that the Bank Directors had attempted to make away with shareholders' capital. "Under these circumstances no wonder that petitioners refused altogether to submit continuous calls on their shares. tioners accordingly begged the Taotai to move the high authorities to telegraph to the English Foreign Office asking them to order the Bank Directors to desist from making any more calls and instruct them to refund the sums petitioners had expended on the purchase of shares. They trusted in this matter. to the sense of justice'and rectitude inherent in the people of England, where commerce was of paramount importance and unscrupulous" company promoters were not allowed to defraud a confiding public.
'On receipt of the above petition certain considerations bearing onthe case presénted themselves to my mind:: 'Commerce between China and: foreign countries' is conducted strictly on lines laid'down by treaty. Now in the treaties it is: stated that subjects of the contracting parties may employ persons in any lawful ea; or may mutually engage. in trade: cannot find any clause permitting take shares in companies. This is doubt because the laws: of the: various, treaty powers. not being identical. each nationality must adhere to its own awe and this applies especially to the case of foreigners in Chins. The same rule holds good with regard to Chinese subject who.must be governed by Chinese law. If Chinese merchants go into (gancripen with foreigners for purposes of trade and dis: putes occur they cannot be settled according to Chinese law nor can they be settled 'Western law, nor do provisions of the treaties apply. If Chinese and Foreign mer-chaute are mixed-up la business' transac. tions endless opportunities will be afforded for unscrupulous: dealings and nefarious practices of. all.'kinds which can Hardly be prevented.:: Endless disputes and litigation
Text read from the printed page and cleaned; old type leaves the occasional error.