Office of the Historian

File No. 14716/2–3.

The Acting Secretary of State to Minister Rockhill.

Department of State,
Washington, October 27, 1908.
No. 507.]

Sir: With reference to the correspondence between the consulate general at Hankow and the legation, in regard to the Tai Hong Co., and the legation’s No. 1636, of June 22, 1908, in this connection to the consulate general at Hankow, there is inclosed herewith a copy of the department’s instruction, of to-day’s date, to the consulate general at Hankow.

It is believed that the substance of this instruction may be of interest to certain of the various consuls in China, and you may, therefore, wish to send copies thereof to those offices where, in your opinion, the correspondence may be of value for future reference and guidance.

I am, etc.,

Robert Bacon.
[Inclosure.]

The Secretary of State to Consul-General Martin.

Department of State,
Washington, October 27, 1908.
No. 100.]

Sir: With further reference to dispatch No. 177, of June 26, 1908, emanating from your consular office, and relating to the status of the Tai Hong Co., the department notes that the legation in its reply has covered, as fully as possible, the various questions submitted to it by the consulate.

It is assumed that a corporation duly organized under American laws is technically regarded, irrespective of the citizenship of its stockholders, as an American corporation, subject, as such, to American jurisdiction, and entitled, therefore, to American protection, in the discretion of this department. This being so, the filing of the article of incorporation in the consulate would seem to be almost as of right, it being understood that such filing indicates nothing except that the corporation is a duly organized American corporation.

Consulates should file articles of incorporation of any American company, unless specific reasons appear why this should not be done. At the same [Page 66] time, a general warning should be given to the representative of each company who presents articles of incorporation for filing, that the department reserves to itself the determination as to whether or not a company, nominally American, in fact represents American beneficial interests to such a substantial degree as to cause the department to interest itself actively in its behalf.

It should also be stated that no attempt is made to lay down any definite rule as to the proportion of stock which must be beneficially owned by American citizens, but that the department, in forming any decision in regard to the matter, will take into consideration all the circumstances in each particular case.

The practice as suggested in the foregoing should be satisfactory to all bona fide American enterprises, and, in view of our present corporation laws in this country, and the absence of corporation laws especially designed for China, it would seem difficult for the department to take any other position.

I am, etc.,

(For the Secretary of State.)
W. J. Carr, Chief Clerk.