The Kaiping Mines: The Times of London, March 2, 1905, p. 9
The remarkable action brought by Chang-Yen-Mao and tried for many days before Mr. Justice Joyce has ended in favor of the plaintiff on all important points. The proceedings were unique and important in several respects. It is rare that a Chinese mandarin seeks justice in our courts; and involved in the dispute between him and the defendants were issues of far-reaching consequence. Had Chang-Yen-Mao lost his action he would probably have fared very badly at the hands of his Government, which had charged him with "fattening" on teh rpoceeds of a fraudulent sale of the property which was the subject-matter in dispute. He has been deprived of the office of Director-General of Mines; his ruin and disgrace, if not worse still, would have followed an adverse decision. It is not too much to add that his failure would have been a misfortune to British interests, and injurious to our good name in the Far East. Chang-Yen-Mao is a representative of the more enlightened of his countrymen, who see that, not hostility to western civilization, but frank recognition of its value is their best policy. With proper guarantees against evils and abuses too common in Oriental countries, European capital might now develop the resources of China in many ways. There are railways to be made, mines to be opened or worked with modern appliances, and all this is to be done only with the cooperation of the better class of officials who have put aside ancient prejudices against the foreigner. Chang-Yen-Mao, who is, as he showed in the witness-box, shrewd and intelligent, seems to have aided not a little the industrial development of his country. He has believed that true patriotism is consistent with the employment of skilled European advisers and the encouragement of European capital. He has suffered not a little for having, in the opinion of the narrow minded, sacrificed Chinese interests to the foreign capitalist. His success in an English court of law will have effects going much beyond the decision of the controversy before Mr. Justice Joyce. His countryment who are suspicious of western finance will know that redress can be had if they are wronged. News of his success will gradually percolate into even remote parts of China, and will inspire confidence in the impartiality of our tribunals. The judgment of yesterday will, perhaps, smooth the way for the entrance of British capital into a country where, given an honest administration, it might be largely employed to the profit of native and western investors.
Stripped of details, the point at issue in the action was simple. Chang-Yen-Mao was director-general of a Chinese company formed in 1882 to work certain mines in the provinces of Chi-li and Johol. Fresh capital was required for the undertaking, and Mr. Detring, a German, who was a Commissioner of Customs in China and also a director of the company, was authorized to take measures to raise the necessary capital. He put himself in communication with the defendants, Moreing and Co., and the result was that by a conveyance of February 19, 1901, all the property of the plaintiff company was transferred to the defendent company. The contention of the plaintiff was that this transfer was executed upon the express condition that a memorandum of even date whould be executed, and should be binding upon the new company. One of the conditions was that the shareholders, Chinese and foreign alike, should have equal votes; that the company should be managed by two boards, English and Chinese; that Chang-Yen-Mao should continue to be director-general; and that the Chinese board should manage the property in China. These provisions, it was said, had not been carried out. The new company refused to recognize them. The Chinese board was powerless; a manager was sent out who said he knew nothing of the memorandum, and the official business of the company was not transacted at Tien-tsin. The plaintiff sought a declaration that the terms of the memorandum were binding upon th ecompany, or that the deed of transfer should be set aside. The defendants did not say that the memorandum was of no effect. Mr. Moreing, in his cross-examination, said that:
some of the directors took the view that the memorandum was not vital, but they still endeavoured to carry it out. It was true that the majority of the board took the view that the memorandum had no legal effect, but witness always dissociated himself from that.
The main point upon which the counsel for the defendants relied was that the memorandum had, according to its reasonable construction, been acted upon, and that the proviso about making Chang director-general "as before" was in direct violation of English law. After a patient hearing the Judge has, in regard to the principal points of the case, decided in favour of the plaintiff. Unless within a reasonable time the terms and conditions of the memorandum are complied with, the Court will do what it can to restore the property, and will take measures by injunction to restrain the defendants from parting with it. What is scarcely less important is the expression of opinion by the Judge that Chang-Yen-Mao had been guilty of no bad faith, whil ethe conduct of some of those concerned in the matter was open to criticism.
Chang-Yen-Mao will go back to China with the esteem of all who heard him give his evidence. He will be able to assure the retrograde party at home that relations with astute British financiers do not necessarily turn out badly. There is no doubt that the events which he disclosed in Court profoundly affected the better class of Chinese, and shook their confidence in British good faith. Justly open to censure, the action of the English company was represented by enemies of this country in the worst colours, and if it had been uncorrected, it would have stood seriously in the way of British enterprise.
Many other lessons are to be deduced from a singularly interesting case. One is the inexpediency of the participation in the affairs of any company by officials at all connected with the Customs administration and the public service which has, under Sir Robert Hart's supervision, gained the confidence of the people of China. Englishmen are jealous of anything that might affect the reputation that he has created for the Imperial Maritme Customs. But the chief reflection which the case suggests is that the victory of Chang-Yen-Mao is also of public importance, and that it will be useful to British capital and enterprise in the struggle now going on against formidable commercial rivals. In restoring his own good name he benefits the credit of this country.
- Herbert Hoover in China http://delong.typepad.com/sdj/2007/07/herbert-hoover-.html
- A Historical Document: Kaiping Mines Memorandum of Agreement http://delong.typepad.com/sdj/2007/07/kaiping-mines-m.html
- A Historical Document: The Pall Mall Gazette on the Kaiping Mines http://delong.typepad.com/delong_economics_only/2007/07/the-pall-mall-g.html