893.5034/10–1745: Telegram
The Secretary of State to the Chargé in China (Robertson)
1853. The following resolution was unanimously adopted at a meeting of representative businessmen called by China Legal Section of Commerce on November 9:
“American business interests highly appreciate Embassy’s representations to Ministry of Foreign Affairs leading to review of Company Law by Supreme National Defense Council. It is the considered opinion of American business interests that certain provisions in the proposed Chinese Company Law in its present form are detrimental to American business interests in China and will, if enacted into law, have the effect of preventing full American participation in the industrialization of China and of limiting the flow of American capital into China, The specific objections to the proposed Chinese Company Law have already been forwarded to the American Embassy. It is now recommended that further representations be made to the Chinese authorities in an effort to have the law in question amended to meet the specific objections referred to above and particularly the definition of a foreign corporation as found in Articles 7 and 292.”
Among those present were Cornell Franklin66 and L. V. Collings of National Foreign Trade Council, A. B. Foye, Mildred Hughes and Viola Smith of China–America Council, William P. Hunt, Duane Wilson of China Corporation, and W. Mayger, Jr., of California Texas Oil Company.
Re your statement (Urtel 1940, Nov. 8) that Law is being returned to Supreme National Defense Council “for its consideration and approval prior to promulgation” the businessmen were not clear as to [Page 1251] whether this would be the normal and regular procedure in any case, or whether the statement of Dr. Kan Nai Kuang was intended to imply that the Council is not satisfied with the Law and presumably will order its revision on a more liberal basis. In other words, it was feared that the return of the Law to the Supreme National Defense Council means that the Council will approve and order its promulgation as it now stands. Dept would appreciate Emb comments by way of clarification of foregoing.
Re Article 305, Embassy’s translation states that a foreign company “may” report certain particulars. If the reporting of the particulars is optional with the foreign company American business interests have no objection. Further information on this subject is requested.
Re Article 298 businessmen wish to know if when applied to the U. S. the expression “provided that the same rights are accorded to Chinese companies by the law of the country of the foreign company’s origin” means the law of the state under which the foreign company is incorporated. If so, the phrase is not objectionable.
Mimeographed copies of enclosure67 to your despatch No. 802, October 15, were distributed to business groups before receipt of Urtel No. 1940, Nov. 8.