that the Chinese Government would offer lease of Wei-hai-Wei to the British Government if they thought their request would meet with a favourable response. Lord Salisbury replied that the policy "at present" pursued by Her Majesty's Government aimed at the discouraging of any alienation of Chinese territory. The discussion of any proposal for the lease of Wei-hai-Wei would accordingly be premature, provided the existing position was not materially altered by the action of other Powers." On March 7th Lord Salisbury telegraphed to Sir Claude, that if, "as the Times reports, the Russians are to have a lease of Port Arthur and Talienwan on the same terms as Germany of Kiao-chau, that it seems desirable for us to make some counter-move. The best plan would perhaps be, on the cession of Wei-hai-Wei by the Japanese, to insist on the refusal of a lease of that port on terms similar to those granted to Germany.' The next day Lord Salisbury telegraphed that the Times also reported that Russia demanded sovereign rights over Port Arthur and Talienwan, and the right to construct a railway from Petuna, on the Trans-Manchurian Railway viâ Mukden to Port Arthur, and that, in the event of non-compliance within four days, Russian troops would advance into Manchuria. On the 9th Sir Claude telegraphed that Russia had demanded the lease of Talienwan and Port Arthur with railway to Port Arthur. No conditions named. The reason for the demand was to "assist in protecting Manchuria against the aggression of other Powers." But Russia declined to inform the Yamên which Power was meant, though England and Japan were evidently intended. Sir Claude added" Yamên are aware that they must yield to Russian demands unless they receive help. They earnestly beg that your Lordship will assist them by giving an assurance to the Russian Government that Her Majesty's Government have no designs on Manchuria. I pointed out that the recent assurances given in the House of Commons showed clearly that Her Majesty's Government had no designs on China, unless driven thereto by aggression of other Powers. For these assurances they evinced great gratitude, but begged me to telegraph their request." In a later telegram he added, that there was no indication of anything in the shape of an ultimatum by Russia; neither, so far as he could learn, had any time limit been given. Salisbury asked Sir N. O'Conor (March 11th) to obtain assurances from Russia with respect to both Port Arthur and Talienwan, that it was not intended to interfere with the stipulations of the Treaty of Tientsin, especially Articles 24, 52, & 54. Sir Nicholas replied on the 13th:"At an interview with the Foreign Minister to-day, his Excellency renewed his assurances that the sovereign rights of the Chinese Government over Port Arthur and Talienwan would be in no way infringed or abrogated

Lord

by their cession on lease to Russia, but it was the firm resolve of the Russian Government to obtain the lease for a period of twenty-five years. I proceeded to point out that assurances had been given to your Lordship by M. de Staal, and had been repeated more than once to me during the negotiations which have been going on here during the last two months, to the effect that British trade would enjoy the free use of any port opened to Russia." On March 8th, Sir N. O'Conor wrote a fuller report of the views of Count Mouravieff. The Count had enlarged upon the vital necessity to Russia of a port on the ice free coast of China. While England, Germany, and France had now naval stations open all the year, Russia was icebound in Vladivostock. Under these circumstances they had no alternative but to demand a cession both of Talienwan and Port Arthur, as one without the other was of no use to them; but they did not demand sovereign rights or a perpetual cession of those places. Talienwan would, his Excellency said, be open to foreign trade like other ports in China." Sir Nicholas represented that the possession of a very strong military position like Port Arthur altered in a most important degree the position of things in China; but Count Mouravieff replied that British interests were principally in the Yang-tsze Valley. He was reminded that British Treaty rights extended over the whole of the Chinese Empire. On March 16, Count Mouravieff authorised Sir Nicholas to say that if the Yamên granted a lease of Port Arthur and Talienwan, "foreign trade shall have free access to both these ports, similarly to other ports in the Chinese Empire; "and that Russia had no intention of infringing British Treaty rights. Sir Nicholas had previously (March 13) asked for such an assurance when he had been informed a prior pledge that any port ("tout port") leased to Russia would be open to foreign trade, applied only to Talienwan. Count Mouravieff was sure Sir Nicholas would admit that he had never given any assurance that Port Arthur would be open to foreign trade. "His Excellency said that he had received the Emperor's orders to tell me that Talienwan would be open to foreign trade, but that his Imperial Majesty had told him, at the same time, that Port Arthur would be regarded strictly as a military port. He could not, therefore, take upon himself to promise that both Port Arthur and Talienwan would be open; but that he would be able to give me a definite answer on Wednesday. In the meantime I could report to your Lordship that the question was under discussion here." In amplification of the telegram of March 16th, showing that the Russian Government then pledged themselves that both Port Arthur and Talienwan should be open to foreign trade, a despatch was printed giving full particulars of the conversation between Sir Nicholas and Count Mouravieff on that

date. "His Imperial Majesty had authorised him (Count Mouravieff) to give the assurance that both Port Arthur and Talienwan should be open to foreign trade, like other Chinese ports." On March 22nd Lord Salisbury telegraphed to Sir N. O'Conor, acknowledging the terms of the Russian assurance -that the Russian Government "have no intention of infringing the rights and privileges guaranteed by existing treaties between China and foreign countries." He added that Her Majesty's Government would not regard with dissatisfaction the holding of a lease by Russia of an ice free port connected by rail with the TransSiberian Railway. The Despatch proceeds: "Questions of an entirely different kind are opened if Russia obtains control of a military port in the neighbourhood of Pekin. Port Arthur is useless for commercial purposes, its whole importance being derived solely from its military strength and strategic position, and its occupation would inevitably be considered in the East as a standing menace to Pekin and the commencement of the partition of China. The military occupation or fortification of any other harbour on the same coast or in the Gulf of Pechili would be open to the same objections with almost equal force. From some observations made by Count Lamsdorff, and reported by you in your Despatch of the 8th instant, Her Majesty's Government gather that this is not a policy favoured by Russia, while it is one to which Her Majesty's Government entertain grave objections. Her Majesty's Government, on the other hand, are prepared to give assurances that beyond the maintenance of existing Treaty rights they have no interests in Manchuria, and to pledge themselves not to occupy any port in the Gulf of Pechili so long as other Powers pursue the same policy." On March 23rd Sir N. O'Conor reported that he had made unsuccessful attempts to induce the Russian Government to abandon their claim to Port Arthur. Count Mouravieff had refused absolutely to admit that the principle of the integrity of the Chinese Empire, which the Russian Government wished to respect, would be violated by the lease of Port Arthur. "Russia could not be denied what had been granted to Japan and Germany; and the only Government that raised objections was that of Her Majesty." The next day the following telegram was received from Sir Claude Macdonald:-"Yamên said Russian Government had informed them that they cannot consider question of Port Arthur and Talienwan apart, and insist on lease of both places being granted to Russia before March 27th, failing which Russia will take hostile measures. Chinese Government are therefore forced against their will to give way.' On March 25th Lord Salisbury telegraphed Sir Claude :-" Balance of power in Gulf of Pechili is materially altered by surrender of Port Arthur by Yamên to Russia. It is therefore necessary to obtain, in the manner you think most efficacious

and speedy, the refusal of Wei-hai-Wei on the departure of the Japanese. The terms should be similar to those granted to Russia for Port Arthur. British fleet is on its way from Hong Kong to Gulf of Pechili." It was at the same time explained to Germany that the demand for a reversionary lease of Wei-hai-Wei did not denote a wish to interfere with the interests of Germany in that region, and that the action of Russia with respect to Port Arthur had compelled Her Majesty's Government to take the course now pursued. On March 23rd Sir Nicholas O'Conor returned to the subject of Port Arthur with Count Mouravieff, urging that the taking of that port was tantamount to commencing the dismemberment of the Chinese Empire. His Excellency, whose remarks" showed some heat," repeated his former arguments and said Russia "must insist upon obtaining a lease of the ports." Sir Nicholas then asked him for a written statement of the assurances he had authorised him to convey to Lord Salisbury. On March 28th M. de Staal wrote to Lord Salisbury as follows:-"By order of my Government, I have the honour to notify to your Excellency that, in virtue of a Convention signed on the 15th (27th) March at Pekin between the Russian representative and the members of the Tsung-li-Yamên, duly authorised for that purpose, Ports Arthur and Talienwan, as well as the adjacent territories, have been ceded to Russia in usufruct by the Chinese Government. These ports and territories will be immediately occupied by the troops of His Majesty the Emperor, my august Master, and the Russian flag will be hoisted beside the Chinese flag. I am likewise charged to inform your Excellency that the Port of Talienwan will be open to foreign commerce, and that the vessels of all friendly nations will receive the fullest hospitality there." Lord Salisbury, in his reply, placed it on record that more comprehensive assurances had been given than that Talienwan should be open to foreign tradenamely, that the maintenance of our rights under the Treaties would not be affected. He instructed Sir N. O'Conor to obtain in writing the assurances given by Count Mouravieff on the 16th, by authority of the Emperor. On April 1st Sir Claude telegraphed that three new ports-Chin-wangtao, San-tuao, and Yochow-were to be opened to foreign trade; and on the 3rd that China would lease Wei-hai-Wei to Great Britain on the same terms as Port Arthur to Russia, Great Britain agreeing not to take possession until the place was given up by Japan, and the lease to con. tinue until Russia ceased to occupy the Liao-tung Peninsula. Yamên asked for special facilities for organisation and training of Chinese navy at Wei-hai-Wei. The lease was accepted. Japan agreed to the arrangement. On April 4th Sir N. O'Conor pressed Count Mouravieff to fulfil his promise to give the assurances of March 16th in writing, and pointed out the difference

between them and the circular telegram issued to Russian representatives abroad. "His Excellency said the moment was not opportune (le temps n'etait pas opportun') for making these assurances public." The circular letter referred to contained no mention of the fact, according to the verbal assurances given Sir Nicholas, that Port Arthur would be open to foreign trade. Replying to the letter in which this omission was pointed out, comments made on the less comprehensive character of the assurances, and a request made for the original assurances to be put in writing. Count Mouravieff wrote that Sir Nicholas's letter "indicates certain misunderstandings." He proceeded (and with the following extract the Correspondence closes) in these terms:"I will begin by pointing out that the ideas which I may have expressed very confidentially on the 4th (16th) and 11th (23rd) March, relative to the conditions in which it seemed desirable to me that Port Arthur and Talienwan should be placed, if China consented to grant a lease of them to Russia, ought never to have been interpreted as 'assurances,' and could not in reality have such a signification. It was evidently impossible for me to make the slightest engagement on this subject before the conclusion of the arrangements which were only signed at Pekin on the 15th (27th) March. An amicable exchange of views between your Excellency and me might well take place; but you will certainly agree, M. l'Ambassadeur, that no Government could pretend to the privilege of being made acquainted with negotiations in progress between two perfectly independent and friendly Powers. You asked me whether, in taking Ports Arthur and Talienwan on lease, Russia intended to maintain the rights of sovereignty of China, and to respect the Treaties existing between that Empire and other States. I answered in the affirmative, and I added that we hoped, moreover, to obtain the opening of the Port of Talienwan, which would offer great advantages to all nations. Now that the negotiations with China have brought about the desired result, all that is entirely confirmed. The substitution of the Russian usufruct for possession by China of Ports Arthur and Talienwan has not affected in any way the interests of the other Powers in those regions; quite on the contrary, thanks to the friendly agreement arrived at between the two great neighbouring Empires, a port hitherto closed is open to the trade of the whole world, and placed under exceptionally favourable conditions, as it is destined to be connected with the great line of the Siberian Railway. As regards all other points, the respect for the sovereign rights of China implies the scrupulous maintenance of the status quo existing before the lease of the ports which have been conceded. Your Excellency having observed to me that men-of-war and merchant ships are, in certain cases provided for by the Treaties, admitted even

into the closed ports of China, I answered that accordingly this facility would be assured to them by the regulations in force. It follows that Port Arthur will be open to English ships on the same conditions as it has always been, but not that Russia should abuse the lease which has been granted to her by a friendly Power to arbitrarily transform a closed and principally military port into a commercial port like any other."

Yang-tsze Region (Non-Alienation of).— A Paper was issued in July containing a despatch from Sir Claude Macdonald, and Notes exchanged with the Chinese Government respecting the non-alienation of the Yang-tsze Region. The Note sent by Sir Claude to the Tsung-li-Yamên is dated February 9th, 1898, and says that their Highnesses and Excellencies have more than once intimated that the Chinese Government were aware of the great importance that has always been attached by Great Britain to the retention in Chinese possession of the Yang-tsze region, now entirely hers, as providing security for the free course and development of trade. It asks to be placed in a position to communicate to Her Majesty's Government a definite assurance that China will never alienate any territory in the provinces adjoining the Yang-tsze to any other Power, whether under lease, mortgage, or any other designation. The translation of the reply of the Tsung-li-Yamên (dated February 11th), after reciting the terms of Sir Claude's Note, is as follows:-" The Yamên have to observe that the Yang-tsze region is of the greatest importance as concerning the whole position (or interests) of China, and it is out of the question that territory (in it) should be mortgaged, leased, or ceded to another Power. Since Her Britannic Majesty's Government has expressed its interest (or anxiety), it is the duty of the Yamên to address this Note to the British Minister for communication to his Government. They avail themselves, &c."

CHINESE CONCESSIONS TO ENGLAND. (See CHINA. PORT ARTHUR.)

CHUA (Prince), King of Uganda. (See AFRICA: UGANDA.)

COMPANIES (WINDING UP).

Board of Trade Report for 1897.Under the Act of 1862 there were in 1897 1,479 Voluntary Liquidations, of which 53 were under the supervision of the Court; and under the Act of 1890, 108 compulsory liquidations by order of the Court-a total of 1,587. The total number of abortive or liquidating companies was in proportion to new companies registered 44 per cent. in 1897, as against 34 per cent. in 1896. The capital involved was £26,747,784 public, and

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£26,799,894 vendors. The Report says:"Whereas in 1892 the proportion of the total capital allotted to vendors in liquidating companies was little more than onehalf of that allotted to the public, it has now reached by successive stages an equal amount; while in the case of the compulsory liquidations, the capital allotted to the vendors is nearly five times as much as that allotted to the public. The statement also shows, so far as liquidating companies can be regarded as affording evidence upon the subject, that while there has been a very great increase in recent years in the total annual amount of capital allotted to vendors, there has been no increase in the annual amount subscribed by the public." The following is the abbreviated summary from the Report of the abuses attending the working of the Companies Acts:-" (1.) As regards prospectuses-(a) They rarely, if ever, disclose the names of the real promoters of the company or the persons responsible for the preparation of the prospectus. (b) Prospectuses rarely, if ever, disclose the terms of the Articles of Association even where these differ materially from the provisions of Table A. (c) Valuations of property are frequently given in a prospectus by experts employed and paid by the vendors. (d) Valuations of businesses frequently

combine the substantial assets of the business with its goodwill. Such combination is generally misleading. (e) Although the promoters and directors of a company may be liable for mis-statements of fact (unless these are made in good faith upon the opinion of an expert), they do not appear to be liable for concealment of facts, even if these are of such a character that, if disclosed, they would effectually prevent subscription of the capital. (2.) As regards directors and their powers-(a) Where they are impecunious and without any knowledge or experience of business, their ignorance or incapacity tends to protect them from any charge of acting in bad faith, while their impecunious position weakens the security arising from the fact of their being under a fiduciary relationship to the shareholders. They frequently act without any share qualification, or upon qualifications given by the promoters, whose instruments they thus become, and their personal interests are in direct antagonism to those of the body for whom they act. Sometimes there is no official or satisfactory method of ascertaining even who are directors, and persons are held out as such who afterwards successfully repudiate their position. (b) The contracts on which a company is based, and on the faith of which subscriptions of capital are obtained, are sometimes altered by the directors after subscription of shares, but without the knowledge and consent of the shareholders, and in such a manner as to entirely change the constitution of the company. (c) It is by the act of allotment that shareholders are fixed with responsibility as members of the company, and this act is that of the directors.

Yet

this allotment is frequently made without any regard to the sufficiency of the capital subscribed for the avowed purposes of the company. Hence subscribers have no security that their subscriptions may not be forfeited for the benefit of the promoters by the inability of the company to carry out the contract on which it is formed; or that, having subscribed on the faith of an adequate capital being required, they may not find themselves members of a company which, owing to its insufficient capital, is entirely unable to carry on its business with success. (3.) As regards guarantees for subscription of capital-(a) Persons are frequently induced to subscribe for shares on an assurance that the subscription of the whole, or of a certain minimum proportion, of the capital has been guaranteed. But there is no security for the adequacy of the guarantee or for its fulfilment by the guarantors, and in some cases such guarantees have been given by persons, or by companies known to the promoters to be insolvent. (b) The terms on which subscriptions are guaranteed are rarely disclosed in a prospectus. Where money payments are made, they are generally made by the promoting vendors, and form a part of the purchasemoney, which is thus rendered delusive as a measure of the value of the property or of its fair market price. But these guarantees also frequently involve undisclosed conditions directly injurious to the interests of the company, such as the right to subscribe for large blocks of further shares at par over a considerable period. Under such conditions, if the shares prove valuable and rise in the market, the guarantors alone reap the benefit; while if the additional capital is required in the interests of the company there is no security for its being obtained; and if it is not required, the company may be loaded with useless capital in order that the guarantors may be enriched at its expense. (c) It may be doubted whether

guaranteed" subscriptions are in all cases beneficial. In the larger class of companies they give rise to the existence of a large body of undisclosed promoters, whose sole interest is to induce the public to relieve them of their obligations, and to enable them to reap a profit without permanent stake in the company, or any interest in its success as a practical undertaking. (4.) As regards debentures-(a) The power possessed by the directors of a company to issue an indefinite amount of debentures covering all the assets of the company, and even the future liability of its members, and of thereafter contracting trading debts which the company has no means of paying except by contracting others, operates as a practical fraud upon creditors, and it also frequently acts injuriously to the interests of shareholders by enabling unscrupulous directors and officers to prolong the existence of an unprofitable enterprise, merely for the purpose of enabling the latter to draw their fees and salaries, while they are knowingly entailing liabilities upon the holders of

partially paid shares which have to be enforced in the liquidation. (b) The absence of any provision requiring debentures to be publicly registered so as to afford information to persons intending to have dealings with the company greatly facilitates fraudulent action by its directors and officers. (c) Debentures, especially mortgage debentures, are generally assumed to constitute an indefeasible charge over the assets charged, while the bonds or the covering deed may contain conditions seriously affecting the holder's rights, of which he is entirely ignorant, and of which no intimation is given in the prospectus. (5.) As regards audit and balance sheets-The absence of imperative statutory conditions as to these has greatly assisted in keeping the shareholders and creditors of companies in ignorance of their true position, and in thereby aggravating the effects of mismanagement, while preventing the possibility of any steps being taken to remedy it."

CONCILIATION ACT.

Correspondence respecting Proceedings in Relation to the Dispute in the South Wales Coal Trade.-On June 28th the Miners' Provisional Committee appealed to the President of the Board of Trade to appoint a Conciliator, in accordance with Subsection (e) of Clause 2 of the Conciliation Act, 1896. Sir Edward Fry was appointed Conciliator, and entered into relations on July 5th with the Coal Owners' Association and with the Men's Committee. On July 13th he made a report to the Board of Trade, from which it appeared that the matters in dispute had been discussed with the Men's Committee, but that the coalowners had declined to recognize his position as Conciliator:-"Sir William Thomas Lewis called, and saw me alone. What took place between us is expressed in a memorandum which I then and there drew up and settled with Sir William Lewis, he making a copy of it for his own use. The memorandum is as follows:-Sir William Thomas Lewis having called upon me at my request, declines to recognise my position as Conciliator in any way, and states that he called merely out of courtesy. further states that the Associated Employers decline to admit any intervention of the Conciliator, or of any other person appointed by the Government or otherwise; that the Associated Employers are prepared to meet the authorized representatives of the men, but without the presence of the Conciliator. I am at liberty to make such use as I think fit of this statement.-E. F., Cardiff, July 9th, 1898, 1 P.M. In the face of this plain declaration by Sir William Lewis I did not, of course, place before him the proposals of the men, in which the umpirage of myself, or someone to be named by me, was an essential term." Sir Edward Fry's subsequent reports show that "this refusal put an end to the possibility

He

Additional Act modifying the International Copyright Convention of September 9th, 1886. Signed at Paris, May 4th, 1896; Ratifications exchanged September 9th, 1897.-Article I. This (A) modifies Article II. of the Convention, and provides that "Authors belonging to any one of the countries of the Union, or their lawful representatives, shall enjoy in the other countries for their works, whether unpublished or published for the first time in one of those countries, the rights which the respective laws do now or shall hereafter grant to nationals." (B) There is this addition: "Posthumous works are included among those to be protected." (C) Authors in countries outside the Union publishing works in a Union country shall be protected. (D) Authors of a Union country shall enjoy in other countries the exclusive right of translation during ten years from date of publication. (E) Article VII. of the Convention shall read:"Serial stories, including tales, published in the newspapers or periodicals of one of the countries of the Union, may not be reproduced, in original or translation, in the other countries, without the sanction of the authors or of their lawful representatives. This stipulation shall apply equally to other articles in newspapers or periodicals, when the authors or editors shall have expressly declared in the newspaper or periodical itself in which they shall have been published that the right of reproduction is prohibited. In the case of periodicals it shall suffice if such prohibition be indicated in general terms at the beginning of each number. In the absence of prohibition, such articles may be reproduced on condition that the source is acknowledged. In any case, the prohibition shall not apply to articles on political questions, to the news of the day, or to miscellaneous information." (F) Pirated works may be seized. (G) Denunciation shall only be effective as regards the country making it. Article II. " (A) In countries of the Union where protection is accorded not only to architectural plans, but also to the architectural works themselves, these works shall be admitted to the benefits of the Berne Convention and of the present Additional Act. (B) Photographic works