893.5034 Registration/2: Telegram
The Consul General at Shanghai (Cunningham) to the Secretary of State
[Received July 3—3:45 p.m.]
The following has been sent to the Legation:
July 3, 5 p.m. Referring to my June 26, 5 p.m. The court at its hearing on the 28th did not modify its former ruling. The additional statement however was made that Japanese extraterritoriality [Page 547] had lapsed and therefore extraterritoriality powers are under the impression that no attempt will be made immediately to force, through the courts, firms enjoying extraterritoriality to register with the Ministry of Industry, Commerce and Labor. Confirming this impression, secretary of Dr. Kung informed a member of my staff that all foreign firms must register in the same manner that they are said to do in Japan and other foreign countries.
Two British cases have been heard since the Mitsui Bussan Kaisha ruling and the defense did not raise the point that was raised in the Japanese case. Two American cases were set for hearing yesterday but were settled outside the court, consequently no ruling was possible.
This office has received a large number of inquiries as to
whether the demand of the Chinese authorities for American
companies to register has the approval of the United States
Government. Many have sought advice since all firms are being
flooded with printed notices from Chinese attorneys to effect
the registration on payment of attorney’s fee of 100 taels. The
secretary here stated that the Ministry’s regulations for the
registration of corporations were issued on December 10,
Supplemental regulations are about to be issued by the Ministry
of Industry, Commerce and Labor and the press states that they
Enquirers are being informed pending instructions from the Legation that the question of registration is being referred to the American [Page 548] Legation for appropriate instructions, that there is no American law which requires American firms to register in China, that it is not believed that because of failure to register with the Ministry of Industry, Commerce and Labor, that firms can be denied the right to bring actions against Chinese in any case. My reason for the last is based largely on article 24 of our treaty of June 16 , 1858.61
I am firmly convinced that the prime object in requiring registration of all firms is to show an unfriendly attitude towards foreign firms since I am reliably informed that very little if any effort is being made to secure the registration of Chinese firms. Inquiry has failed to reveal a single case where a Chinese plaintiff’s case has been dismissed because of the failure to register with the Chinese authorities.
Repeated to the Department.
Copy handed to Minister.