The Canton Electrical Power Company was one of the earlier and larger electricity companies in China. At the beginning, it was established by the British Russell Company, and then was sold to Chinese officials and merchants in 1909. Later, when the official shares were transferred to the merchants, it became a purely commercial corporation. In 1929, due to shortage of funds, the company fell into difficulties. The Canton Municipal Government took over the business. The shareholders protested, but in vain. Until 1936, when Kuangtung and Kuangsi provinces were controlled by the Central Government, the dispute of ownership was solved reasonably. The significance of the above case is twofold: 1. After being taken over by the Municipal Government, business of the company was better than before. The fundamental cause was that the government, with its political power, raised funds by increasing electrical fees, which had been refused before. Besides, the government did not play well to protect the commercial business. Any kind of regulation system has its eufunction and dysfunction at the same time. These two functions exchange their relative proportions according to environment. At a time when private electricity corporations were in larger proportion, to protect their business was very important. It was not a matter of public or private ownership of the company. 2. The original regulations relating to the electricity company published by the Central Government intended to protect the electricity corporation. But they had to be carried out by the local government. If the local government disregarded them, the Central Government sometimes had no power to force the local government to obey them. This was the case of the Canton Municipal Government. When the Central Government. Controlled the province, the personnel relationship between the Municipal Government. And the Central Government was in a harmonious condition, and Mayor Tsung Yang-fu believed in government control of the business as well as merchant's fair share of the profits, therefore, the original shareholders were refunded their investment in a reasonable way. It shows that personnel relationships were more important than regulations. China was still a country ruled by person, not by law. The value of a jurisdiction system did not overwhelm the value of the social system.