Proposal to Move Head Office from London After a meeting of the Board of the International Investment Trust Ca, Ltd, held on Dec. 11, the {following statement was issued for publication:
The Board met to consider the request which is being forwarded on behalf of shareholders resident in China to the Head Office of the Shanghai Electric Construction Ca. Ltd, in London, that the Company should be transferred to Shanghai.
'The suggestion for transfer of the Company was first made in 1919, and has been revived period calls' since. During the intervening period, the proportion of, the Com-bony's' shares held in China has steadily increased, and in the early part, of the present year, it was considered desirable "again to revive the question, Informal overtures were made in England, and
was received from" shareholders was indicated that, if a request Yepresenting any considerable proportion of the company's capital, would receive the careful sideration of the Board. Accordingly, arrangements were proceeded with for such a request to be form ally' made, and, the Internationa Investment "Trust Co., Ltd as large shareholders, were requested act asthe medium for the transmission of the shareholders' application. Tt has since been int mated that the Trust Co.'s certify cate as to share-holdings will be acceptable to the English Board.
It is common knowledge that the earnings of the Tramway Company are. constantly jeopardised fluctuations in exchange, and Tecent developments have tended markedly to increase this.
Inthe opinion of Shanghai shareholders. the chief "reasons, amongst others, which necessitate the transfer of the Company Shanghai are as follo Management: It, is obviously undesirable that a Compan operating in Shanghai and largely owned, shareholders in, China be controlled from abroad, although no criticism of any kind is made of the management of the Com-any up to the present time, Finance: It has been the practice for surplus earnings to be remitted at intervals during the year to land, such earnings, before ultimately. "reaching the shareholders thus being subject to. some-mes very considerable exchange fluctuations. Now that so, lange proportion of the company's shares owned in China, it seems anomalous that earnings should be transferred into sterling and subsequently drawn by shareholders again in the form of local currency.
So far as British subjects resi dent in China are concerned, it is felt that any question of contribu tion to British Government funds stages. should be one for consideration companies or subjects in China should so contribute, Should a transfer of the Company fo Shanghai be arranged, the rent year's profits will sti subject to deduction of British Income Tax.
"INOPPORTUNE" PROPOSAL, The directors of the International Trust & Investment Ca., Ltd. are to be congratulated on the statement which they issued on Friday afternoon in connection with the proposal to remove the head office of the Shanghai Electric Construction Ca,, there and now and then. At this his. toric moment it was coraceating with, them; it indicated thus the failure of someone to take off the receiver properly, a clumsiness with the dial or irreverence with the instrament.
a piece of well-oiled organisation the out over was a triumph. The wizards and the wizards' wives were warmly congratulated. 'Then cars came and, after a dash out into the bitter cold' of the early Sunday, the chief wizard's wife and daughter fby charming Hospitality, fortified grateful guests for the final Journey to bed with pleasant refresh ment.
So the imps have been launched on their sea of trouble. They refuse to adopt the polite apologies of the voices which sang their swan song] before midnight. They are not "sor-r-r-y" at alli If they are sic
board have to flash for assistance. they and the buttons on the Bat they are good imps on the [whole—especially if their nex masters follow the rules." That is why they do not have'to be troubled or "sorry." is at least frank, and sets forth the company's case from the point of view of the shareholders and divectorial prudence, but does not an-Swer the contention which is being! Publicly voiced that the time is not opportune for such an action as 33 contemplated.
Whether it, is the real intention or net, it is clear from the last two Paragraphs of the statement that} The payment of income tax to the British government by this company wil be avoided and itis to be Strongly emphasized that at the pre-
homo registered company will un-gent moment such " move by dloubtediy be regarded by" public opinion in the United Kingdom as highly unpatriotic, Whatever wer the reasons Uhap affected the deci sion the promoters of the Shanghai Electric Construction Ca, Ltd, chose to register as a British company with head offices in London, and the benefits that might or might not have been obtained thereby—it was fully recognized at the time, it is hoped—had to be paid for in the shape of whatever taxation Parliament corgi to impose. upon com panies. in. general. The tramway) company from that time onwards en tinued to pay and is at present ing such "charges." People of British and non-British nationality who invested in the concern in those jays and who have done 90. since, ido with fall knowledge of the liabilities attendant upon Home ropistzation, and if taxation has become heavier than was anticipated ft'was one of the risks they xan when they and their predecessor decided to take advantage of domes tic registration. 'They have recelved and are receiving whatever benefits. there are attendant upon the course they originally adopted. If they axe not at present getting what they expected, or if they find they are paying more than' they had hoped to, there is hardly sufficient Justification in all the circumstances for their going back upon a bargain of their own election.
Ordinarily an attempt to escape id this payment of income tax, which may not necessarily amount to its main features, may be looked Spon' with a certain amount of cynical amusement, but when conditions are as they are, when it is Yanlized that the Home government Sannct afford to lose any' part of its revenue, however small it might be, any movement which may"-assume the colour of such a reproach Is to be highly reprobated. At the present time there is a definite charge Spon taxpayers at Home for. the protection of British interests in China in general, and in Shanghai particular. This company, with its head offs in London carries on its business in Shanghai under con. ditions. which. constitute a definite charge upon the budget of the government at home. Since the arrival the Shanghai Defence Force in Yo27""a number of questions has een atked in the House of Commone relative to the non-payment of me come tax by British residents in China. The attitude of the Govern-rent appears to have been hat such 4 tax would constitute an improper inurden upon British trade, a. view which seems ultimately to have ison adopted by the government of the United States when it also reli ed its citizen nent of a Shanghai Electric Construction Ca., Ltd, elected of its own free will be formed in a manner which neces-stated such payment to the British Government, though other concerns did not, and to that extent pledged itself to a definite course of' action. What, it bs to be asked, will be the reaction. at Home, veen the propagendists working in Britain on Behalf of China, seize upon this latest development and. present i with all the force of which they ar0 capable before the bar of home public opinion? -What will members the House of Commons think, When "questions. arising' from this Suggested transfer are. put to the government? To say the least the impressions which are thus Tender ed likely will be unfortunate. They! will tend to divert sympathetic coneration of the. Britwh comimanry's case at a time when that quality is most to be desired.
"For this reason what might dirianly have been a domestic ques-ion for the consideration of the rectors of the company alone' becomes one of the gravest importance to the community as a whole. Tt is nly within a comparatively recent! period that something like an tentive ear thas been given to the case which if now becomes the daty, of the Shanghai' British' Residents Association to pat forward. But the privilege of receiving aut attén-
Text read from the printed page and cleaned; old type leaves the occasional error.