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must be the martyrdom of Lieut. WOODS, and few outside the unthinking mob will sympathise with them.
CHINA INVFST VENT
CORPORATION,
THE HONGKONG WEEKLY PRESS AND
(Desember 23, 1907. policy. The analogy is almost complete, sava | back with a very liberal rate of interest.' I. that our obligations are redeemed in numerical would be obviously impossible for us to havt order, after maturity; straight fo insurance followed the career of all similar concernos obligations are redeemed after death of the From Mr. Black's statements it is clear that în insured. Our payments are like premium pay. spite of untoward results at Canton, Honolulu, ments; our application of funds is to creation and Kansas City the scheme has proved mucoma. of a reserve for redemption, and to operating ful. This confirms our contention that, whils expenses; our reserve is invested at the highest there is no inherent reason why the schéme possible interest, to inoresso the returns ander careful management should not succeed, of the bondholders. We eliminate the death such careful management is a sine qua non,” risk and substitute a fixed order of payment of redemption. Insurance actuaries fore tell exactly what percentage of the total insured will die annually, and establish premium rates to meet there losses; our investment actuaries know with certainty the number of polioy. bolders that will continue their payments until maturity, and fix the amounts that must be raised by investment of funds to meet the ontlay. The analogy is more perfect when endowment or investment policy issued by in considering our plan in conjunction with the
suranc+ companies. These have been the secret of the enormous growth of insurance business, Their charge, above the straight life risk, is nothing more than faking your money in small instalments to invest for you. The great companies have amassed almost incredible reserves and assets, thus showing that they are
Finally, in an interview, the American Consul stated that the Consular certificate of registration guaranteed no more than it said on the face of it; the Corporation, he was advised, appeared to be organized regularly according to American law. Whatever interest the consular officials might take in the concern in their private capacities was not to be construed as official business was legal and its organization support and countenance. Beyond that its
regular, the Consulate had no guarantee to offer, because it was not its business to do There would be no official scrutiny of ts accounts.
(Daily Press, December 18th.) As was to be expected, the comments upon the promotion of the China Investment Corporation, which we reproduced from the columns of our Shanghai contemporary, have elicited replies. The president of the Corporation has replied with some heat, and the American Consul has explained how he stands officially with regard to the new concern. Unfortunately, we are not yet in a position to discuss the scheme with any confidence, though on the strength of what has taken place at Canton, we cannot avoid entertaining doubts of its value to the public. If any of the gentlemen interested send us the necessary full particulars, as we have been expecting would be done, we will examine and report on them as fairly as possible. Meanwhile, the President's idea able to repay a small interest, with the principle, THE MILITARY CONTRIBUTION
of the value of publicity does not appear to be quite orthodox. He appears to think that newspapers have no duty in such a connection, when he writes:
"So far as you have set forth facts regarding our company, we thank you for the attention. Wherein you pass to editorial conclusion, and launch upon an attack against our interests, we respectfully ask you to inspect the ordinance of God or man that places you in judgement over us, Most people claiming civilization have properly constituted tribunals for adjudication. Amongst such peoples property rights are not destroyed and lives blighted upon the whim of individuals or ia retaliation for business com natition. With this class of people, we would suggest further, that when rights come to arbitrament, the accused or defendant is not condemned until his osse is heard. Then evidence is weighed, and then only, is judge. ment delivered. You have occupied the bench of a self-constituted judge, aud you have delivered judgement without our attacked interests being heard. You have assumed the ability to pass on complicated investment affairs, which occupy the full lives of some men in laborious work.”
That is mere highfalutin nonsense, even if it had not been the case, as our con- temporary explains, that the President had himself invited criticism, requested the attendance of a reporter, complained of the absence of a report, submitted a copy of the Corporation's bond, and verbally challenged investigation. If he had chosen to ignore the newspapers altogether, it would still have been their duty, in the interests of their readers, to investigate a concern that was inviting subscriptions from the public and promising a good investment.
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and yet accumulate hundreds of millions of dollars for the reserves. Our plan which is well tried and successful, is to pay less commis sion to agenta on premiums and invest reserves in local realty yielding higher interest than is possible for the great companies investing hun dreds of millions. Your example of our 131 monthly 85 payments, compounded for elevan year period, is to the point; but misapplied. You have one bank advertising in your columus that it will pay on fixed deposit 54 per cent, showing that the very lowest paid in the community is about equal to your supposed rate. An average of 8 per cent for the investment company is conservative, for a much better figure is being
constantly earned here. Take the 35 monthly instalments, for 134 months, compounded sight per cent interest, and the result is about $1,100 00 - $100.00 more than the exaot amount
of our guarantee. If has been proved in every insurance or investment company opened that the company always rea- lizes vastly greater profit than interest returns from the reserve investments, because of lapses, forfeitures and cash surrenders.
As sure as the
insurance actuary's table, is this earning. If every man insured died during the early life of bis policy, insurance companies charging present rates would fail; yet so infallible is the mortuary estimate that insurance companies are a solid sto., are almost equally unerring. Our fair in- as rook. Our actuary estimate of forfeitures terest income promises enough to meet obliga- tions, while the big profits certain to accrua from forfeitures, etc.. will meet all
other expenditures and pay the bondholders a hand some profit above the guarantee.
"
After that he says the Corporation will have five satisfactory trustees, already arranged for; that it loses by paying annu) interest, and not the investor; that its investors are not supposed to go to England, where their heirs would have difficulty in preventing forfeiture of monies paid in; but that in any case they would have six months grace in which to renew the payments; that the reserve is in no worse case than many other companies; and that the Corporation will be under the same publicity suffered by all other companies.
The President suggests that the letter to the paper asking for information and editorial advice was not genuine; claims that it should have been sent to the Cor- poration officials for reply; states that registration at the American Consulate proves that the Corporation is legally organized and constituted; mentions that so far Judge WILFLEY's observations (if made) about the Corporation, canuot count; he could only say he
kuew nothing about it, since its affairs have not been brought before him; says that it is erroneous to state that all similar com- panies have come to grief many of them are still operating, with increasing assets, security, and confidence; that any impro- two instant artered toes proving "The instances referred to by us of perly managed company may fail ; announces that it was no secret the paid-up capital amounts to forty thousand dollars, a quite ample sum; and argues :
You have kindly taken up the arguments
of ora business rivals. You think there is no analogy between our bond and a life insurance
We have tried faithfully to give the gist of the President's reply, which contains much that we could not be reasonably expected to publish.
Our contemporary mildly rebukes him for heat, irrelevance, and rbetorical exag. geration, and says :
failures in America and Hawaii occurred in Kansas City in 1905 and at Honolula this year. In the former (to quote from the San Francisco Chronicle) the company wrote contracts with individuals who obligated themselves to pay certain sums for eighty weeks, at the end of which the individual was to receive his money'
RO.
(Daily Press, December 19th.) Hongkong legislators ont be unofficial side may yet be inclined to take courage from the results of Singapore's agitation to reduce We have spoken the Military contribution. before of the discouragement that takes hold of those who from time to time attempt the task of “ kicking against the pricks." It is no unfamiliar sensation either here or at Singapore, where also there are, as the Straits Times phrases it, "old and tried
warriors who have taken off their armour
now
44
and resigned themselves to their late." Our southern contemporary claims that there is every reason to be satisfied with the progress of the agitation for a readjustment of the military tax on colonial prospority. They have succeeded in overcoining myopic unofficial opposition to the raising of the question," in encouraging the dis- couraged agitators who had been sulking in their tents, and in winning some sympathy even in the official phalanx. Further hope is
based on the fact that the noise of their complainings has gone farther afield, that the agitation has That lifts it from the status of parochial heen taken up by the press of London. discontent, and puts the question where a timely shove from Hongkong would be most effective. Our contemporary has no doubt that a simultaneous resolution by the Un- official Members of the Legislative Councils of Singapore and Hongkong and a petition to the Becretary of State for the Colonies at the time Parliament is sitting would have the desired effect of forcing the question upon the consideration of the Imperial authorities. The following reference is made to the contribution by the Investor's Review of November 9th :---
The Straits Settlements are objecting strsa- uously to the increase of their military bardeos. A three days' debate took place in the Legisla tive Council on the budget, and the fute to spend £205,000 as a military contribution in the current year was carried only by the csating vote of the Governor. All the unofficial mom. bers strongly condemned the vote, and pointed out that the obarge had increased from 298,000 in 1898 to £248,6 5 in 1994, while it is still at the figure above named. No wonder there is a graphic mistake: the deficit le mote t budget deficit of about £5,000. [This is a tall 15,000, being $421,000 on the original Budge statement, though it is only fair to point out that this was modified.—ED., &. T. Unless this wasteful drain of the revenue is curtailed, ther will before long be good reason to doubt capacity of the Straits Settlements to pay full interest on their debt.