Asked by a representative of the "North-China Daily News' as to the present status of American firms with reference to the China Trade Act, Mr. Frank Rhea, Reggistrar, gave a most optimistic outline. The act has mn functioning only since the last session of Congress and benefits coming from incorporated firms under the act will not become evident until next year, therefore business houses are not rushing to avail themselves of its; privileges, but are cautiously investigating fully before making the transition from state incorporation to Federal. The authorities have hitherto issued but one certificate, but there is now before them another and some half-dozen firms have intimated their prospective transfer.
The vital feature of this act is without doubt, the stability and unification of procedure, though until it becomes more generally adopted, it will be but one of the 52 methods in which an American Company doing external business may be legally established-4g states, Alaska, Philippines, U.S. Court for China and China Trade Act. It will simplify legal procedure, and will induce banks to aid firms more readily, for in this case it is only necessary that they be cognizant of the Federal laws instead of the many states.
Of more interest on the financial side to shareholders and promoters in general is the provision which eliminates the Chinese citizen and American citizen resident in China, shareholders in a Company organized under the Trade Act, from the British Consulate, a quiet wed-j Federal incorporation taxes. This ding was solemnized at Holy Trinity} feature. is not wholly satisfactory, Cathedral on Tuesday, between Mr.' but was thd best that could be silk testing station in Shanghai. done under the existing conditions, it being generally recognized that the law as it stands is a compromise. Under the laws of 1922, this tax is 12} per cent..of the dividend declared. It is the purpose of commercial bodies in China to prevail upon Congress to amend the law, so that all shareholders are to benefit and avoid this 12} per cent. With the normal taxes suspended, only the surtaxes on incomes would be paid.
It is further proposed to get Congress to redraft the entire law for the purposes of simplification, making it easier to read and understand. As it now stands, it allows for a conflict between the Registrar and the Department of, Internal Revenue, because of irregularities existing. Mr. Rhea proposes to travel to Washington in May and attempt to arrive at an understand. ing with that office without special acts of Congress. He hopes to bring back to China a-revised forms for returns to be made, so that no difficulties may arise between the Department and American business concerns. a Americans are, particularly interested in the abolition of all Income tax as far as the individual is concerned, but it is not for proponents of the China. Trade Act to further this. It may be of more than passing interest to note that a suit is now pending in the Supreme Court on the part of American citizens from Mexico City, who claim that the revenue officials cannot collect income tax from those not resident within the country. If their contention is up held, then the matter is also settle ed for Americans in, the Orient.
Text read from the printed page and cleaned; old type leaves the occasional error.