330
is no account to meet such writings off as may be considered necessary. This is a matter, how ever, which must be dealt with at another meet- ing. In the meantime the private circular from the Manila shareholders, which I have already referred to, will give you their views on the matter. We feel very much indebted to the Manila Committee for their valuable services, but in the private circular some of the statements as affecting the management here have evidently been written under a misapprehension as to facts and we are writing to correct them on these points. Before proposing the adoption of the report and accounts I shall be very glad in- deed to answer any questions that shareholders might have to put.
THE HONGKONG WEEKLY PRESS AND
| Hongkong to justify the sending to Manila for such a lot of timber. Even if you did get an order for a large amount you would probably have to leave a vacant space in the ship. If the General Managers and the Manila Committee send consignments to Hong- kong only under indent the trade in Manila timber will go to the people who will ship small amounts and take the re- sponsibility. I
do not say
we ought to put up $24,000 worth of timber, but I am con- vinced we ought to have a stock of timber from which & Chinaman coming into the office can buy what he wants. The profit on sales of timber I see is $16,372.36, and it would be interesting to know what amount of that profit was made in Manila and what amount in Hong- kong. There is another item, that of sundry debtors, which represents a large amount, and I presume we shall get a fair portion of that; whether it is good or not I do not know. should like to hear some explanation of what I might almost say is the case which is put forward by the Manila Committee against the General Managers here.
The CHAIRMAN-1 think those points can be answered very simply. The first one was about the Manila Committee and the General Managers here. I may say there has been
Mr. DARBY-There are one or two questions I should like to ask about the position of the accounts, but before doing so I should like, if I am not out of order, to refer to a circular which has been issued to shareholders which, although marked "Private and confidential," has been referred to in the Chairman's speech. On the face of it the circular shows there is not 8 fortunate understanding between the General Managers and the Manila Committee. The Committee make several remarks as to the way in which the finances have been conducted here by the General Managers; in fact they seem to think that their recommendations have
no friction whatever between the not been carried out, inasmuch as the General Committee and the Managers here, and the Managers have retained the sum of $10,000 statements in the circular have been entirely which they asked should be remitted to Manila. unlooked for by us and give the first and They also asked that, as the Company had an only intimation of anything approach. overdraft at Manila, all the assets of the Coming friction. We had hitherto been under the pany should be sent down there in order to meet the overdraft rather than keep money in the bank here at five per cent. Here is another thing. They say they sent up and asked the Company to remit $3,000 or $4,000 towards the $16,000. -I do not know whether the $16,000 refers to the estimated value of the timber stocks in
Hongkong which they said had been partially realised; that does not seem to be quite clear. Here is another thing. The timber in stock on 31st September in Manila and Hongkong was put down as costing $32,250.
The CHAIRMAN-In Hongkong; not in
Manila.
Manila
I will
impression that things were going on smoothly and satisfactorily and we shall very deeply regret if this ceases to be the case. It would be quite prejudicial to the interests of the Com- pany to have any friction whatever. just explain that when the Manila Committee were first appointed we took special care to point out to them that as the articles of associa- tion stood at present Hongkong must be the head office of the Company and as the articles pro- vide for the General Managers and Consulting Committee to be in Hongkong we must con. tinue to have supreme control, although we have done everything to give the Committee on that side a free hand in the control of the business, for we recognise that we have a very strong, trust- worthy, and energetic Committee, and in that lies the only chance of getting the Company out of its difficulties. It the shareholders are of opinion that matters can be improved by the transfer of the management to Manila they can rely upon our co-operation; but such trans- ference can be brought about only by an extensive alteration of the articles of association. In regard to the matter of finance, I may say that at present beyond a few hundred dollars to meet current requirements we have none of the Company's funds available to remit to Manila. We had had several special and what we con- sidered impertaut reasons for retaining the funds on this side and under our own trol before the appointment of the Com- mittee in Manila, which perhaps I need not specify here. Since the Manila Com- mittee took charge we have done our best to send them all the funds they wanted. It does look rather a peculiar method of finance to have an overdraft at Manila and a fixed deposit here, but I think you will give us credit for having reasons which overweigh every other consideration. As regards the apparent loss I think there has been no loss to the Company by our previously having retained the funds on this side. Indeed there has been a considerable gain, as if we had sent money in 1894 we should have done so at an exchange of something like 20 per cent. premium, whereas we have been re- mitting at an exchange of about 4 cent.
pre- mium, thus showing a large saving, whilst the difference between the rate of interest charged
con-
Mr. DARBY-In Hongkong. I beg your pardon. On the 20th September the Committee appear to have written to the General Managers objecting to the valuation cost. They ap- parently received a letter from you stating that the stock represented on 31st December last as worth $32,250 is only worth $16,000. It is difficult to understand that there should be a drop in timber in the course of nine months which meant a depreciation of the timber stocks from, roughly speaking, $32,000 to one half the amount. Whether the Committee at Manila are in full possession of the facts I do not know, but at the same time I think it is some- thing which might be explained. There is another point in the circular, and that is one under the heading of consignments to Hongkong. Shanghai, and Japan. The Committee say that in future they will only ship under indents to Hongkong, I will not ask for figures now, but before a final decision is come to on that point we should know what is the amount of timber sold under indents in Hongkong since the formation of the Commirtee, and what has been the amount of timber sold out of stock. If the company is going to confine itself to shipments of timber from Manila it will practically con- fire itself to large institutions such as the Dock Company or any other firm or company which wants to build a wharf, for instance, and which can give an order to us for a large quantity of timber and wait for it. To the best of my knowledge very large portion of the timber business in Hongkong is done through Chinese con- tractors coming and wanting to know what they can buy timber for to repair houses which have caught fire or got damaged in any other way. in Manila on overdraft and that allowed here on Thirty or forty dollars' worth of timber would deposits was only about 3 per cent. This be a large amount for him, and you would balance of $10,000 referred to in the circular as have to wait for a considerable number of such having been detained by us was required to indents to be sent down to Manila before you cover advances made by us to the Company, sent a chartered timber ship to carry the but as soon 83 We have funds in hand timber. The cargo which a ship can carry we shall go on remitting in order to ease is perhaps 24,000 cubic feet of timber. Well, things on that side. In reference to the stock that is a large order, and I do not think, unless we can get an order from a contractor who has got to build something very large, you would ever, be able to get an indent from
per
of timber here, that figure of $32,250 represents the actual cost of the Hongkong stock of tim. ber on the 31st December last. The actual cost of our stock is something like $29,000, but that
ยท [October 30, 1895.
includes the cost of cargo which was received by us this year. The cause of loss on this tim ber is, I think, rather due to the shipment at times of bad, inferior, and unsuitable timber, negligence of orders causing timber to be re jected and left on our hands; also the man- ager has been paying too high prices to con tractors, much higher than Mr. Brown did. Part of the old stock comprised in the $32,000 has been sold and it realised prices above our ex pectations. There is still some left; how much it is rather difficult at the moment to say. We do not intend to take up the depreciation of the Hongkong stook by itself; we propose dealing with the whole of the assets at one and the same time, as they all stand at the same cost. The shipments to Hongkong used to show very fair profits, the average for the first four years being about $18,000 per annum. Latterly the shipments have fallen off a great deal and I think I have shown you the reasons for the decrease. If we have a return of better management in the Philippines, leading to a reduction in the prices paid, the shipment of better timber, and B closer attention to the execution of orders, I see no reason why there should not be a greater im- provement if not a return to previous figures. In Shanghai there is very little left in stock and in Japan there is none at all. I quite agree with the view you have expressed think if we confine ourselves to indents we shall about establishing a small order trade, and I put ourselves out of touch with the small buyers. I cannot give you the figures right should say. the sales from stock have been, off of sales on indents as against stock, but I roughly speaking, considerably larger than the
sales on indent. If we stick to indents we shall be doing away with a large number of consumers coming forward with small orders. I think the only thing to be done is to get the manager to exercise a great deal of care. Of the $16,000 referred to as profit on sales of $3,300 in Hongkong, and $2,300 in Shanghai.. timber about $10,000 was made in Manila, The profit in Hongkong ought certainly to be largely increased. The item sundry debtors is undoubtedly one which ought to be written down. It amounted to very large figures at the time Mr. Anderson was manager, and up to the time he left he led us to understand that most of the debts were certainly good. I think That is a matter which the Manila Committee are we shall have to allow a good deal of that off. looking into, and we hope in due course to have a special report upon that matter as well as upon other items. I think I have touched upon all the points, Mr. Darby?
of
Mr. DARBY-Yes, thank you. I am very glad you have given this explanation. course I understand there are certain things which it is inadvisable to make public. I think as soon as we know what the Manila Committee is going to do we shall have a fair idea of the position of the Company. They have recommended the reconstruction of the
Company with a capital of $90,000. There is only one other point, that is the question of indents. I suppose there is nothing in the world that gives so little satisfaction as a timber indent when it is laid down on fixed lines. I now have much pleasure in seconding the adoption of the report.
Carried.
the
Mr. COUGHTRIE proposed the election of Mr. Clement Palmer and Mr. G. C. Cox on Consulting Committee until the next annual meeting. In doing so he said I understand that the number of shareholders eligible for election on the Consulting Committee and resident in Hongkong is very limited. There-- fore
think we may consider ourselves fortunate in getting Mr. Palmer particularly, as he is an architect, to take this appointment, and Mr. Cox will also give his assistance.
Mr. HAETON seconded. Carried.
On the motion of Mr. DARBY, seconded by Mr. HABTON Mr. Fullerton Henderson was re- elected auditor.
The CHAIRMAN-That concludes the busi-- ness of the meeting, gentlemen. I am sorry there is such a small attendance.
Mr. COUGHTRIE-I beg to propose a hearty vote of thanks to the General Managers, in Hongkong, and a special vote of thanks to the
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