Deputy Commissioner of Public Works to Captain R.M.J. Martin. Shanghai,  April 27, 1931. Source: SMA (SMC), U1-14-3261 (0182). 

Reference attached. This matter has been held up as Golding, the Manager of the Claude Neon Lights, has been ill for some time. He is now fit again and Young has discussed matters with him and as the Claude Neon do about 90% of the work it would appear to be necessary to deal wih them only in the first place. Goding is quite willing to discuss the matter with the Police at any time.  

Deputy Commissioner of Public Works to Captain R.M.J. Martin. Shanghai, May 4, 1931. Source: SMA (SMC), U1-14-3261 (0183). 

With reference to your letter No. D.2/422 of April 27, Golding has been interwiewed and is going to submit proposals for discussion in due course. In the meantime it is desirable from the police point of view that no permit should be issued in the future for any red or green electrical lighting devices for a space of 25 feet above ground level on or faceing all public roads and I shall be glad to know whether your department will be prepared to include such a clause in future permits. If you agree with this suggestion, do you think a Municipal Notification will be necessary ? I imagine it will only be necessary to inform the four companies interested in this particular form of lighting. 

I return herewith the copy of the Municipal Advocate's letter to me of February 24 which I think belongs to your files. I already have the original on file in this office.  

Municipal Advocate Report to Commissioner of Police - "Re: Restriction of Coloured Lighting for Advertising Purposes". Shanghai, February 24, 1931. Source: SMA (SMC), U1-14-3261 (0185-0193).
 
It is a pleasure to comply with your request for an opinion relative to the above  entitled matter. The facts upon which this opinion is based may be briefly epitomized as follows: 

The Council has in the past issued permits for the erection and maintenance of Neon lights. The general form of a permit, among other things, provides as follows: "Permission is hereby given to erect and maintin one Neon light sign...during a period of ... days, upon the following conditions." 

Following this general statement, twenty-two conditions are set forther, the most important of which, as far as this opinion is concerned, are Conditions No.17 and 22. 

Condition 17 provides : "That the bottom of any fixed sign or lamp be at least 11 feet above the footpath or 15 feet above the carriageway, and the total projection does not exceed 3 feet from the Municipal Road Line. 

Condition 22 provides : "That all work be carried out in accordance with the Deposited Plans, Land Regulations, Bye-Laws and Rules with respect to New Buidings, and that in the event of any infringement thereof, or of the above conditions, the Permit be liable to withdrawal and the work to be stopped by the Council. 

On December 30, 1930, the Council, by its Order No. 4044 (See Municipal Gazette February 21, 1931) specified (p.2/9) certain fees for the issue and maintenance of advertising signs. It seems that according to police opinion, considerable confusion has resulted on account of the use of electric red and green advertising signs. The drivers of vehicles appear to have a grievance in not being able to clearly distinguish traffic signal lights from red and green advertising lights. It is advisable from a police point of view, to curtail the use of such advertising lights, so that the maximum efficacy of traffic and telephone signal lights may be maintained. 

The Deputy Commissioner of Police, in charge of Divisions, has made the following suggestions: 

1. That the Council forthwith prohibit the further installation of red and green lighting devices for a space of 25 feet above ground level on or facing all public roads ; and 
2. That from January 1, 1932, existing installations at present using red and green lighting effects for a space of 5 feet above ground level be required to change their color schemes. 

The questions for opinion are whether or not the Council can legally put into operation the above specified two suggestions. 

The first question is comparatively simple. Bye-law 33, among other things, provides as follows: "We person shall undertake any building operations whether temporary or permanent; or undertake any structural alterations or repairs to any building or structure or any work invoving the placing of ladders in any Municipal road or alley; or erect any straw or matting shed, bamboo or other buildings of a like nature; or undertake any bunding on any (p.3/9) creek or remove mud from any creek or foreshores; or open up any Municipal road or alley, or erect any fences, hoardings, signboards or other structures, abbuting on any Municipal road or alley, or erect any matsheds, sunshades, lamps or other structures, in such a manner as to overhand any Municipal road or alley or undertake the landing or any building materials at any Municipal pontoon, jetty or road in each or any of the above cases within such limits without a permit first obtained therefor from the Municipal Council. 

As far as this opinion is concerned, the most important provision of the above quoted section are that the Council has power to require a permit of persons:  

1. who undertake say building operations, whether temporary ot permanent 
2. who erect hoardings, sign boards or other structures abutting on any municipal road or alleyway, and 
3. who erect any sunshade lamps or other structures, in such a manner as to ever hand any municipal road or alleyway.

To construct and install a Neon light sign within the Settlement is to undertake building operations, and it would appear not to be essential for such sign board or lamp to abut on or overhang a municipal road or alleyway. 

The word "license" and "permit" are often used synonymously. (37 Corpus Juris, p.167). While it is a rule that the power to license or to impose a license tax must rest strictly in a grant of authority, certain incidental powers are usually conferred by implication, if not expressly. Accordingly where express authority is given to license, it follows by necessary implication that power is given to regulate (17 Ruling Case law, p.531). A license (p.4/9) takes his license subject to such conditions as the Council sees fit to impose. A municipality is not necessarily limited in its powers because of the fact that a licence has incurred expenses in erecting buildings or other structures for operating his business. (17 Ruling Case law, p.554). The conditions imposed, however, must be reasonable, proper and necessary. It would appear not to be unreasonable to limit a license in point of time. Such a license expires at the end of the stipulated period (37 Corpus Juris, p.289). Neither does it appear to be unreasonable to prohibit lighting devices for a space of 25 feet above ground level or facing on public roads. 

In order to properly carry our suggestion 1, an amendment to Clause 17 of the permit would seem to be necessary. 
The opinion is therefore expressed that Suggestion 1 can be put into force and effect by amending the permit issued by the Public Works Department. In this connection, it is suggested that the whole permit should be redrafted and rearranged. This department will be glad to redraft such form permit after having received suggestions as to its conditions from both Public Works and Police Departments. 

The second question is more difficult to answer. In 43 Corpus Juris, p.349, it is stated: (p.5/9) "As a general rule, a building permit has none of the elements of a contract and may be changed or entirely revoked, even though based on a valuable consideration if it becomes necessary so to change or revoke it in the exercise of the police power. Applicant's property is not exempt from the operation of subsequent ordinances and regulations legally enacted by the corporation, as for instance, his property may be subject to an ordinance or regulation extending the fire limits. But when once the proper authorities grant a permit for the erection or alteration of a structure, after applicant has made contracts and incurred liabilities thereon, he acquires a kind of property right under such circumstances, it is generally held that the permit cannot be revoked withtout cause or in the absence of any public necessity for such action." 

The above statement of the law seems to be suported by a wealth of American authority. In the case of City of Lowell vs. Ammedee Archambault (Supreme Court of Mass. (1 L.R.A. p. 458) it was held that a licence granted by a Board of Health under statutory authority for the erection of a stable, without any limit as to time, cannot be revoked by such board in the absence of statutory authority, existing regulations of the board, or some provision in the license itseld for revocation. Mr. Justice Braley, who delivered the opinion of the Court, among other things, said: "A licensee should not be subjected to the uncertainties that constantly would arise if unauthorized limitations, of which he can have no knowledge, are subsequently and without notice to be read into his license at the pleasure of the licensing board. Besides, all reasonable police regulations enacted for the preservation of the public health or morality, where a penalty is provided for their violation, while they may limit or prevent the use or enjoyment or property except under certain restrictions, and are constitutional, create statutory mindmeanors, which are not to be extended by implications."

"The licensee issued to the defendant contained no limit of time for its exercise, nor (p.6/9) was it made subject to an existing regulation which so provided. It stated that permission was given to keep eight horses, and prupoerted to and did set out in full the statute under which it was granted, but contained no further recitals. Thus neither by the terms, nor by the statute itself, was it made recevable; nor does it appear that any regulations have been adopted, or promulgated the violation of which would cause a forfeiture. Originally it may have been improvidently issued, but upon being informed that citizens in the vicinity of the defendant's premises objected to the erection of the building for its proposed use, it was not within the power of the Board od Health, even after a hearing, in the absence of authority conferred upon them by legislative sanction to deprive him of the privilege they had unreservedly granted. 

In the case of Dainese v. Cooke, 91 U.S. 580, the Supreme Court of the United States held that the proper officed gives a permit for the erection of a building contemplated by a contract shown him a clear case of departure from the permit, or of danger to the public existing must be shown before he one obtaining such permit can be arrested midway in the construction of the building and required to remove it. 

In a similar cas (Caroline W/ Bobbins v. City of Los Angeles, 49 I. Ed. p. 160) the Supreme Court of the United States, in discussing the right of a municipality to alter or change a permit after the property had been constructed, said : "To justify the state in thus interposing its authority in behalf of the public it must appear, first, that the interest of the public generally as distinguised from those of a particular class, require such interferences, and second, that the means are reasonable necessary for the accomplishement of the purpose, and not unduly oppressive upon individuals. The legislature may not, under the guise of protecting the public interests, arbitrarily interfere with private business or impose unusual and unncessary restrictions upon lawful occupations. In other words, its (p. 7/9) determination as to what is a proper exercise of its police powers is not final or conclusive, but is subject to the supervision of the courts." 

A careful search of the English authorities has been made, but this department has been unable to fin any English case which bears upon this question. It does not appear that the licensees have in any way violated the conditions set forth in Condition No. 22 of the permit. They have not in any way failed to carry out the work in accordance with the deposited plans, or violated the Land Regulations, Bye Laws and Rules with respect to new buildings. 

Applying the foregoing decisions to the facts, the Council cannot require the owners of existing installations to change their color schemes unless 

1. It can be proved that the licensees have violated one of the provisions of Condition 22 of the permit, or 
2. It can be clearly shown that the signs as now constructed are a danger to the public interests, or 
3. That the period for which the permits have been granted have expired. 

Before the permits could be withdrawn for a violation of Condition 22, a clear case of infringement of one of the provisions of said condition would have to be proved. While it seems to be clear that the police are of opinion that the lights as now erected are a danger to the public, such opinion is not sufficient unless supported by other strong and convincing evidence. The opinion of the Municipal Council as to what is a danger to the public interest is not final or conclusive, but is subject to the supervision of the courts.

From the face of the (p.8/9) sample permit attached to the file, it appears that it was issued during a period of 30th June, 1931. It is understood that this was intended to mean that the permit expired on June 30, 1931. This although it may have been the intention, is not clear from the wording. It should read "during a period of...to ...". If no period is designated in the permit, the right to maintain the light would seem to be for an indefinite period of time, such right having been granted upon the payment of sufficient consideration and revokable only for sufficient cause. The question is further complicated by the fact that most of the Neon Lights in Shanghai were erected by American corporations. As to what interest these corporations have in signs already erected does not appear. As has been pointed out in previous opinion, there is grave doubt as to whether or not the Land Regulations and By Laws are applicatble to American citizens residing in China. (See Opinion entitled "Fire at No.3540 East Yuhang Road, dated April 5, 1930, and Opinion entitled "Municipal Bye-Law", dated April 10, 1930).

The opinion is therefore expressed that it is exceedingly doubtful whether or not the Council has the right to require owners of electric light signs already installed to alter their general make-up prior to the expiration of the time specified in the permits. It is felt however that the owners of such signs would undoubtedly be reasonable and would not object to a change in their lighting scheme, if it were tactfully demonstrated to them that such was for the benefit of the public as a whole. It is therefore suggested that the owners of existing signs be approached in a tactful and diplomatic manner with the request - not the demand, that their lighting signs be changed to conform to such new conditions as may be specified in permits for the issuance of new signs. 

Deputy Commissioner of Public Works to Commissioner of Police. "Neon Lighting". Shanghai, May 7, 1931. Source: SMA (SMC), UA-14-3261 (0197). 

Reference your C2864 dated May 4th. The sudden introduction of a clause in the permits such as you suggest would undoubtedly raise an outcry from the Neon Light Companies as it would practically preclude the erection of signs in public roads as most of them are fixed at a level below 25 feet. It is also probable that the Companies have money invested in stocks which would not be much use to them and this might lead to a claim against the Council. 

Another point to consider is that the Council's right to control signs that do not project over the public road is doubtful so that lamps would still be erected on private property and in windows facing public roads in all probability. 

I would suggest putting that matter up to the Council for approval and then issuing a notification giving a date, say six months ahead, when the regulation would be enforced.