Presented to both Houses of Parliament by Command of His Majesty.

PRINTED FOR HIS MAJESTY'S STATIONERY OFFICE, BY DARLING & SON, LTD., 34-40, BACON STREET, E.

And to be purchased, either directly or through any Bookseller, from EYRE & SPOTTISWOÓDE, EAST HARDING STREET, FLEET STREET, E.C., and 32, ABINGDON STREET, WESTMINSTER, S.W.;

or OLIVER & BOYD, EDINBURGH;

or E. PONSONBY, 116, GRAFTON STREET, DUBLIN.

1902.

Commercial, Labour and Statistical Department,

Board of Trade, Whitehall Gardens.

February, 1902.

A. E. BATEMAN.

RESPECTING THE

POSITION OF INDUSTRIAL AND COMMERCIAL

ESTABLISHMENTS

OWNED OR MANAGED BY

BRITISH SUBJECTS OR COMPANIES IN FOREIGN COUNTRIES.

The following questions in the form of a circular, dated March 31st, 1898, were sent by the Secretary of State for Foreign Affairs, acting at the request of the Board of Trade, to His Majesty's Representatives in various foreign

countries :

I. "Whether mills or factories worked by foreigners (British subjects) or foreign companies in the respective countries, or their dependencies, enjoy the same protection, and have all the same privileges as if worked by natives or subjects of the Suzerain State.'

99

II. "Whether foreign (British), commercial, or industrial establishments situated in such countries or territories enjoy the same privileges, favours, and protection as if they belong to natives or subjects of the Suzerain State:

(a) When owned by private persons residing—

(i.) in the United Kingdom;

(i.) in the state or territory in which the establishment is situated.

(b.) When owned by a company the registered office of which

is

(i.) in the United Kingdom;

(ii) in the state or territory in which the establishment is situated."

Answers were received from the following countries :-Russia, Norway, Sweden, Denmark, Germany (Prussia, Saxony, Wurtemberg, Bavaria, Grand Duchy of Hesse, Hamburg, Bremen), Netherlands and Dutch Colonies, Belgium, France, Portugal, Spain and Spanish Colonies, Italy, Switzerland, Austria-Hungary, Greece, Montenegro, Servia, Roumania, Bulgaria, Turkey, Egypt, Morocco, Persia, Siam, China, Japan, United States, Mexico, Central American Republics, Venezuela, Ecuador, Peru, Chile, Bolivia, Brazil, Uruguay.

In May, 1901, His Majesty's Representatives were requested to revise and bring up to date the information previously supplied, and the following memorandum is based on the information so obtained.

The countries may be broadly classified into two groups. The first, which includes the greater number, consists of countries where British subjects and British capital are treated in commercial and industrial undertakings in

substantially the same way as nationals and national capital, the regulations existing for foreigners alone being unimportant and to a large extent of a purely formal character. Such regulations include the appointment of resident agents, the deposit of certain documents with the competent authorities, and

so on.

The second group consists of countries where distinct differential treatment is applied to foreign companies. This group includes Russia, Norway, Sweden, Portugal (as regards insurance and banking companies), Roumania, Bulgaria, Japan (as regards mining and the law of real property), the Dutch Colonies and Uruguay. (as regards insurance companies).

Detailed statements follow with regard to each of the countries concerning which information has been received.

In the

Russia. In Poland foreigners may only establish mills and factories and work them in towns; moreover, they may only acquire land in connection with an industry, and that land may not exceed 250 acres. Caucasus, Russian Turkestan, Transcaspian and Maritime regions, and in other parts of Asiatic Russia, special permission from the Government is required by foreigners in order to open or work mills. In Russia proper, British companies may work mills and factories on the same conditions as natives; and commercial and industrial establishments, when owned by individuals, also enjoy equality.

As regards companies with registered office in the United Kingdom, the sanction of the Committee of Ministers must be obtained before beginning operations. The conditions of sanction vary slightly according to the nature of the establishment, but the most important is that the Russian Government reserves the right of withdrawing its sanction to the further existence of any foreign company at any moment, at its own discretion, and without assigning any reason. Other conditions are, that all the property of the company within the limits of the Empire, and all payments due to it, shall be devoted preferentially to satisfying claims arising in Russia; that there shall be a responsible special agency in Russia, which shall send copies of the annual reports to the Government, and give notice in the official papers of general meetings of shareholders; that all disputes shall be settled by Russian law; that the activity of the company shall be strictly limited to the specified objects; and lastly, that the permit to operate requires confirmation at the end of three years.

A company with a registered office in Russia, working under statutes granted by the Russian Government, has the rights and privileges of a Russian company, but one or two Russians must be members of the Board, and the majority of the shares must be nominative and not to bearer. There is, too, a tendency to assimilate the treatment of these companies to that of the class mentioned above by the insertion of a clause reserving the right of cancelling

sanction.

Foreign insurance companies, on establishing themselves in Russia, must at once lodge in the State Bank, as guarantee, a sum of money proportionate to the amount insured by them in Russia.

Norway. Foreigners owning factories in Norway and foreign commercial or industrial establishments established in Norway enjoy the same protection and advantages as Norwegian citizens.

It must, however, be remarked that such establishments cannot now in general be acquired by foreigners, who may not, without the permission of the King, acquire real estate or the right to use it. To this there are two exceptions(1) the right to work mines of metals and ores may be claimed by the finder, and the consequent rights as regards real estate connected therewith are free to all. (2) The right to use real estate can be acquired in the part of the country which lies south of the county of Tromsö when the right is established for a period of ten years at most, and there is not reserved to the occupier the right to claim on the expiration of the period fixed a renewal of the contract. Further, the contract may not concern any other right to use forests except

that of cutting wood for home needs, and may not concern the hire or other rights to the use of fishing grounds, train oil manufactories, curing-houses, or other establishments for the utilization of the produce of fisheries.

Sweden.-No foreigner without the permission of the King can acquire real estate, nor can he, without special permission, carry on trade, manufacture, or other similar business. An application for permission must state the place where the works or business are to be carried on and be accompanied by (1) an attestation that the applicant is of age and has a good reputation, and (2) a guarantee of security for the payment of rates and taxes during three years, which must be renewed at the end of that period. The permission entitles him to transport his wares but not to carry on pedlary or conduct a selling off. The purchase of fish for export may be conducted without a permission so long as no process is carried on in connection with the export except such as is required for its conservation during transport as fresh fish. A foreigner may be a part owner, up to one third of the tonnage, of a Swedish ship employed in home or foreign trade, but may not be a principal owner.

No foreigner may purchase a mining concession in the kingdom, and only Swedish subjects can be accepted as shareholders in the mines belonging to the Crown.

Joint Stock Companies can only be founded by persons resident in the Kingdom. No foreigner nor Swede residing abroad, nor Norwegian subject, can be on the Board of Directors of a Joint Stock Company without the Company securing the King's sanction. Even in that case no more than one-third of the Board can consist of such persons. No foreigner can be on the Board of a Company of the class known as Registered Companies for Economical Operations." No foreigner can be a shareholder in a Joint Stock Banking Company.

66

A foreign insurance office has the right to transact insurance business in the Kingdom only if this be done through a general agent resident in the Kingdom who, if a proper person, has obtained the right to carry on business in the Kingdom. The general agency can be exercised by a Swedish Joint Stock or other Company if all the members of the Board of Directors, or all the partners, are qualified to be general agents. A foreign insurance office may transact the insurance business without observing these conditions.

Denmark. British subjects desiring to open industrial or commercial establishments can do so immediately by taking out the necessary licence on the same terms as Danish subjects.

Germany. The rule is that equality of treatment is extended to foreigners and Foreign companies, but the Imperial Government reserves the following rights, which are apparently in force in all the Federal States :

i. Right of Governments, imperial and local, to expel foreigners.

ii. Condition of reciprocity as regards trade marks and patents, as well as regards the German law against disloyal competition.

iii. Obligation of foreign companies trading in Germany to register the names and addresses of branch houses in Germany.

iv. Conditional treatment of foreign commercial travellers and hawkers visiting and doing business in Germany.

v. Control in certain respects of foreign insurance companies by the German Imperial Board for private insurance.

vi. Obligation of foreign subjects and companies before commencing legal proceedings to deposit a sum of money to cover costs.

The above are the general rules, but apparently separate States have the right of imposing special conditions.