CHESHIRE, United States Vice-Consul-General, in charge to Intendant Shao, September 12, 1882

Mr. Cheshire to Intendant Shao.

Sir: Referring to the conversation I had with your excellency in regard to the cotton yarn company started by W. S. Wetmore, esq., an American citizen, of the firm of Frazar & Co., I have the honor to inform you that I shall communicate the facts of the case to the United States minister at Peking, with a view to ascertain whether there are any existing laws or regulations in China regarding the formation, by foreigners, of companies for the purpose of manufacturing native products, as I have no record of any in the archives of this consulate-general.

Pending a reply from the United States minister as to whether the establishment of such companies is an infringement of the law of China or not, Mr. Wetmore will temporarily cease carrying on the company he has formed.

I may inform you that Mr. Wetmore started this company precisely in the same way as other companies have been started of late by foreign merchants for the working of native products, and as it is a matter affecting American interests, it is but right and proper that it should be determined in accordance with justice and equity. Mr. Wetmore is a merchant of well-known reputation, and he would not have spent the time and trouble he has taken if he thought the carrying out of the undertaking was illegal.

Further, if it is contrary to existing regulations for foreigners to establish companies in China, may I ask your excellency how is it that various companies have been started in Shanghai by foreigners during the past few years, and that the Chinese authorities have never taken any action to interdict their operation?

I have, &c.,