"
"
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Angust 6, 1898.}
extension of British trade. Only three miles of territory have until now been owned by the British on the peninsula facing Hongkong, but now there is every ground "for hoping that an area has been acquired "for all the development of the Colony "which will be required in the next decade. “For the most part the new territory is of such a character as to be suitable for mill sites, and I anticipate that cotton and other factories will soon spring up there, "where labour is cheap and where the waterways provide facilities for trans- porting the produce of the factories to the consuming millions in the interior. The new territory is really at the door of South China, and with proper develop ment it ought to be most valuable to British interests. One great advantage "of the new area is that it includes a range "of mountains which overlook Hongkong,
"
"
15
"C
**
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"and until
CC
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now these mountains have
furnished a point from which a foreign Power could have attacked the defences "of Hongkong with long range guns. The "extended territory furnishes a splendid opportunity for the construction of a rail- way into the interior and even to Canton, which will be reached, I am confident, some day. This line was surveyed years ago, and the fact that uo Canton-Kowloon
60
66
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CHINA OVERLAND TRADE REPORT.
sions which if adhered to will render the Kowloon Convention a monument of British diplomatic incapacity.
THE HONGKONG AND SHANGHAI BANK AND A GOLD STANDARD.
line has been already constructed is due to "the insecurity of property felt by mer- "terior." The hurried manner in which fund. No addition was made to the fund these remarks are obviously strung toge-half-year ended 30th June, 1892, another in the succeeding half-year, while in the ther shows plainly that the arti-t-reporter bad gathered sufficient material for his article, and could not take any more on board, otherwise perhaps he would have been able to give to the readers of Commerce a somewhat more lucid account of the ter- ritorial concession now giving the colony so much discontent and disquiet. All the advantages claimed for the extension of territory by Mr. WENYON and more would no doubt accrue if the territory were really British, but if the concession is to be ham- pered with restrictions which will render the colony a sort of tenant on lease of China, with many irksome restrictions in the lease, its value will be vastly diminished.
115
the accounts as presented to the share- holders in conjunction with the fall in silver there is no escape from the fact that there has been a large depreciation in terms of gold. And unfortunately there is no prospect of finality to the loss from this cause. Those who predict that exchange will fall to a shilling are just as likely to be right as those who hold it has should say, for a not inconsiderable" slump" already reached bottom, much more so, we
mination of the Hispano-American war. be looked for immediately on the ter- During the next seven years the Bank may go on adding steadily to its reserve and yet at the end of that time find that its gold position is as much worse then as compared with to-day's as to-day's is worse than that of 1891.
may
In view of the effect of the fall in
(Daily Press, 1st August.) The shareholders of the Hongkong and Shanghai Bank have good reason to con- gratulate themselves on the excellent report Directors at the approaching meeting, to be placed before them by the Court of provided, that is, that they are content to regard their investment as standing entirely on a silver basis. Roughly speaking the profits amount to twenty-four per cent, for the half-year, a result of which any in- stitution might be proud and which speaks which the Bank's affairs have been con eloquently to the ability and assiduity with ducted by the popular Chief Manager and exchange on the value of the Bank's funds the directors and shareholders may perhaps his staff. The institution has now fully recovered from the series of disasters which be induced to consider the question whether silver is after all such an admirable currency commenced in 1891 and is at present in a stronger position than ever before, regarded medium, even in the Far East, as is claimed. from a silver point of view. On the 31st There would be no advantage in the Bank's December, 1890, the reserve fund stood at stating its capital and presenting its ac- counts in gold so long as the currency of $5,100,000, to which had to be added, in round figures, 82,500,000, premium on the the countries in which the principal portion new issue of shares, making a total of of its business is transacted is silver, but $7,600,000. In the report for the half-year bring about a change in the currency. the Bauk is almost strong enough to ended 30th June, 1891, however, $1,300,000 It Hongkong adopted the gold standard "chants and others interested in the in- / had to be withdrawn from the reserve | China might possibly follow suit, but even if no official action were taken in that country there would be no difficulty in $3,000,000 was withdrawn, reducing it to making gold the medium of the Bank's $3,300,000. Since then appropriations to
business at the treaty ports, where the great the reserve und have been steadily made, bulk of the foreign trade is already prac and latterly in very large amounts, the tically conducted on a gold basis, the rate appropriation recommended in the present of exchange being agreed upon when con- report bringing the fund up to the hand-1racts are entered into. The chief opponents of the adoption of a gold standard for some total of $9,000,000. When the ac- counts for the half-year now entered upon Hongkong are believed to be the various come to be made up it is not unlikely that banking institutions, which make large will bring the fund up to ten millions, or another million may be available, which profits from the fluctuations of the sil- ver market, but we fail to see the advant- age of these large profits if they are not large the same amount as the capital, which was at one time regarded as the final goal to be enough to keep pace with the shrinkage in aimed at. Shareholders are now,
the value of the Banks' funds caused by the however, agreed, we believe, as to the desirability of continuing to build up the reserve. experience of 1891 and 1892 showed how a strong reserve is, and that necessity becomes still more apparent if the Bank's position be appraised in terms of gold. The exchange question is the fly in the ointment that the Bank's share holders have to reckon with, and a very irritating fly it is. During the half- year ended 30th June, 1891, the Bank's capital and reserve fund amounted together to close upon $17,600,000, which at the rate of exchange at which the dividend was paid, namely, 3s. 2td., was equivalent to over £2,800,000. To-day the capital and reserve fund amount to $19,000,000, which, at the rate at which the dividend is to be paid, namely, 18. 11d., represents in gold £1,800,000. Thus, while handsome profits have been made in silver, good dividends paid, and large amounts placed to the reserve, the result of the seven years' working nevertheless shows a depreciation in the value of the Bank's capital and reserve as expressed in gold of £1,000,000. No doubt the Bank's gold investments are worth considerably more than the figures in silver at which they stand in the books, the value of the Bank pre- mises has been written down to probably one half or less of the real value, dead stock has been written off altogether, and in various other respects it may be shown
Mr. WENYON is represented as giving utterance to a conviction that some day the proposed railway from Kowloon to the interior will be made and that it will jeventually reach Canton, much as if the project was a stupendous undertaking, at tended by abnormal difficulties, instead of being a line of less than one hundred miles through a by uo means impracticable country. The line would probably have been constructed years ago, for it received the Imperial sanction early in the nineties, but for the persistent obstruction of the then Viceroy LI HANG-CHANG, whose greedy palm required oiling to an inordinate extent. The official obstructions were so great that the scheme would have had to be aban- doned in any case, even if the question of control could have been satisfactorily settled. There ought, however, now that the Tsung-li Yame can, thanks to Rus- sia's initiative, be brought to see reason, to be no difficulty in a British Syndicate readily acquiring the concession to make this very desirable railway, which they should then seek power to continue to Wu- chang. We say there ought to be no diffi- culty, but it would seem as if the British Representative is not allowed to exert the same influence as his Continental colleagues, and that even in so simple a matter as the leasing of a few leagues of more or less bar-
uecessary
that
The
ren mountains at the back of Kowloon he
the institution is iu an ex- is called upon to make compensating couces-ceedingly comfortable position, but taking
decline of exchange. If the Hongkong and Shanghai Bank were to pronounce in favour of a gold standard no doubt the other Banks would go on the same side and the community would follow suit. Mr. JACKSON has rendered invalable services not only to the Bank but to the colony at large, and if his good work, to give us a gold standard he could persuade himself, as the crown of before he leaves-and the decision rests with him more than with any other in- dividual, in fact with him almost altogether
We
-he would confer an incalculable benefit not only upon the present but upon all future generations. suspect, however, that Mr. JACKSON will not feel inclined to do anything of the kind, for in the past he has been a staunch adherent of silver, and we believe he is so still. We have, needless to say, a very great respect for Mr. JACKSON's opinion, but we believe nevertheless that a gold standard would be a good thing for the colony. A shrinkage of a million sterling in the value of the assets of the Hongkong and Shanghai Bank in the course of seven years, notwithstanding the addition of four- teen lakhs in silver to the reserve fund, must strike everyone as a circumstance of some importance.
The report of the Grand Hotel, Limited Yokohama, for the past half-year shows a net profit of 36,384 yen. The directors propose to pay a dividend of 10 per cent. for the half-year," and carry forward 6,384 yen. pay off debentures to the amount of 5,000 yen,
!
£