Evening star., 1923-12-30
u. S. SAID TO VIOLATE
OWN OPEN-DOOR POLICY
Americans Doing Business i'm China
Handicapped, Foreign Rivals
Gaining Advantage.

After several years of considera-
ton, Congress, in September. 1922.
passed the China trade act, the pri-
mary purposes of which were:
Cd To put American interests do
ing business in China on equality
Of opportunity" with other nationals
doing business in China from the
standpoint of home taxation.
(2) AS a means of inducing Chinese
capital to participate with American
capital in business undertakings In
China under American management.
(3) To provide a practical manner
for federal incorporation OF such
American undertakings to secure both
protection under American laws ad
ministered in China under the United
States court of China and the Amer
lean diplomatic and consular service
in China.
VIII Press for Action.
Claiming that "the act falls far
short of exemptfng from United
States home taxation American in
terests In China or of putting then
on an equality of opportunity with
other nationals doing business there
because other nationals are given
complete immunity from home taxa
tion," Representative Dyer is deter
mined to push fot early action his
amendm ent.
Representative Dyer finds that the
China trade act as it now stands
"penalize all stockholders in under
Ii frc
cept individual Chinese and American
residents in China, and the latter
having to pay normal income taxes
on all dividends from China trade act
corporations, are given only partial
exemption from United States home
taxation"
Proposed Amendments.
The amendments which have been
introduced by Representative Dyer
can be summarized as follows:
% Exemption from federal cor
poration taxes on the net income Of
China trade corporations derived
from sources within China.
(2) Exemption from United States
taxes on dividends of China trade act
corporations to all stockholders resi-
dent in China.
(3) Reduce number of necessary in
corporations from five to three.
(4) Change provision of maintain
ing a resident director in the Dis
trict of Columbia to a resident agent
accredited to accept legal service.
(5) Permit stock to be issued AT
par or more than par, but not less
than par.
(6) Permit six months for full pay
| nent of initial capital.
ca Permit proxy voting of stock.
(S) Require president and treas
urer to be American citizens. ~
g, Require majority Amciis2n
ownership of shipping companies in
| corporated under the China trade act
(10) Require corporate seal which
is now optional.
(1) Repeal all laws, rules or regu-
1ations conflicting with the China
trade act
Would Remove Troubles.
These amendments. Representatiy-
Dyer and the officials of the Depart
menI OIL 1eGl, would
move most Of the present disabilities
under the act There would remain.
however, the bothersome corporation
capital stock tax, which might well
be repaid, they say, by an annual
fee to be paid in China, as is done
by British China companies.
1t would eliminate the most sub
| stantial handicap remaining IL there
were also added a provision that China
trade act companies could have such
branch offices in the United States as,
in the judgment of the Secretary of
Commerce, Shall be Incidental" to
handling the business of such con-
Germs aiding in developing commerce
between the United States and China.
There is a similar provision in the
Edge foreign banking law and there
seems no good reason why such "a
provision should not be accorded
China trade act corporations so that
concerns may transact their bust
| ness with China in the most advan-
tageous manner.