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HONG KONG
HONG KONG DAILY PRESS, MONDAY, MARCH 2, 1931.
BANK SURMOUNTS DEPRESSION.
THE
PROFITS
SHOW INCREASE OF $6,500,000.
·ECONOMIC RECOVERY LARGĖLY DEPENDS ON PERMANENT PEACE IN CHINA,
SOME FACTS AND FIGURES ABOUT THE SILVER MARKET.
The Chairman of the Hong Kong and Shanghai Banking Corporation (Mr. J. A. Phimmer), speaking no thờ annual general meeting of shareholders, held here on Saturday, was able to announce that the profits for the past year were 820,728,000, which showed an increase of 80,600,000” on the previous year. In spite of the fact that the exchange rate and dropped by 32,7′ per cent., -the profits expressed in sterling were only £16,000-Juss than last year,
The Directors' fees in future are to be £5,000 instead of the former $30,000...., Reviewing the situation Mr. Plummer emphasised that B5 million sauces of silver in ex- ceas of requirements were placed last year on the market. He did not think that any of the schemes at present suggested for improving the prices of, silver were practicable. Trade would, revivo if there was perco in China, and, in time, the currency problem would surmount the difficulties. Pence prospects in China were good, but it could not be forgotten that much depend- ed on the continuance of good-will between the Nanking and Makdeu- Governments.
In referring to extra-territoriality and the position of foreigners in Chinn, Mr. Plunumer. said, in effect, that while the rapid surrender of foreign rights and privileges was most undesir able, we have got to face a progressive solution, of this problem in accordance with Chinh's wisher.
THE CHINESE POLITICAL SITUATION ANALYSED.
THOSE PRESENT.
As shown in the Profit and Loss Account, the amount available, Supporting the Chairman were after deducting the interim divid the Hon. Mr. C. G. S. Mackie (De-end and Directors remuneration, is $16,031,550,52 which it is propos- puty Chairmnu), the Hou. I. Jed to deal with as follows: Paterson, Messrs. W. II. Bell, B. Lander Lewis, . Miskin, T. E. Pearce, T. H. R. Shaw, J. P. Warren (Directors), fogether with
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To pay a final divid
Balance carried for- ward to the new ac- conut
meantime we cannot disguise from ourselves that during the past year the fall of silver has been a calamity for the Eastern trade, a calamity | seriously enhanced by the simal
tangou decline of world commodity prices.
prise. In these circumstances I do not propose to dwell by the in dividual misfortune of the various markets. In India, of course, the etamontin situation, has been largely overshadowed by political develor ients. Of these I will only say that I think we should add our voice to the tribute paid to the work of the Round Table Confer ence. I inverely hope that the con- ciliatory spirit which came to the fore in the delegates discussions will find a reflection in luddin and provids the foundation for a friend ly and nating solution of the prob, lein of India's future government,
manufacturing interests, including sperato peasants organised more or both management and labour, and less wider communist leadership, In secondly because it is leading to a certain arena the Civil Government thorough re-survey-of the machinery is said to have been superseded by of production and distribution of Soviet organs which havo set up British goods for China and will, their own system and even estab he doubt, bring to light whatever|lished achosis and banks on the weak points the present system con- communist pattern. The movement tains both at home and in the East. reached its height fest summer when Foreign trade with China, after Changsha was aired and looted having proceeded on somewhat and Hankow seriously threatened, stereotyped lines during the past The cessation of civil war haring. century, is now experiencing rapid freed the hands of the Government, ly changing conditiona There is military measures 'are now cin faut.. a call for adaptation all along the the outwine of which we wait line to meet the new conditions with considerable anxiety. Early and to cope with the daily in reports of the success of the operá- erensing competition with which we tions have not been too encairag- are faced. In these circumstances ing. In regard to Japan there are two a general overhaul of the position financial operations of considerable should greatly assist. Efforts are, moment to record the return to we know, being made at home to fren gold basis of currency and the rationalite export industries and floating Ast May of conversion trust that the Mission's report will, bonds in London and New York to among other things, lend impetus provide for the final redemption of to this very desirable process. We {
Japan.
Ožina Trade.
Political Bituation in China. I will now review shortly the political situation in China.
The movement in largely a natural outcome of the misery wrought on the people by militarism and war. Insofar as this is the case, the only effective cure lira in betlering local conditions by the establishment of peace and good government. If these should not lo forthcoming there is ground for the gravest feurs, as to what may eventually happen.
With, the fall in silver, and tho world slump in prices, added to the internal discusions of which I have been spenking, any radical economic state of the country has improvement in the finances, and naturally been, impossible.
Government Finances.
the 1903 4 per cent. loan which | shall await it with much interest, matured on January 1 Inst. The successful nccomplishment of these twa operations redounds to the credit of the Japanese Government and our congratulations are due to the Minister of Finance whose skil After another year of civil fight ful handling of the situation made ing, the country is now enjoying & 'them possible. Our Corporation
fresh period of peace. This wel participated as one of the issuing by some na merely a lull between come state of affairs is interpreted banks in the London flotation which met with great success. The credit storms, by others as marking the of the Japanese Government is reculminating point of the National flected in the fact that these bonds Government's struggle to establish now stand at a 4 per cent, -pro
its supremacy. Exporienen of the As regards the national exe mium.
past makes one slow to accept the chequer," the current needs of the latter view too unreservedly, but Government required' the sam I think there is more room for during the year of new" Jonni-orf -The monotonous story of lack of optimism than, for some years past the security chießy of the Customs- markets for raw materiale export and fair reason to hope that the mounting to 314 millions and ed and lack of purchasing power lifting of the clouds is more than making net incrense in the for imported goods, which repeat- temporary. There is no need to national debt of slightly over ed itself in India, Malaya, the burden you with a detailed account 800,00,000. The introduction of i Philippines and Japan, applied also of last year's struggle which, budgeting system is still being. with the further burden of a dis though on a larger scale, resembled awaited, but a step in the right organized exchange-to the case of the previous trials of strength bedirection was taken by the Minister The Outlook for Silver.
China, and was reflected in the tween Nanking and the provinces of Finnned who published a general end of £3 per share
trade of Hong Kong. Our local At one period of the fighting the financial statement early in the with a bonus of £1
This being, merchants are
merchants, it is true, found some rebellious leaders were so successful year. A serica of reports by the per share (subject
naturally, asking what is the outcompensating advantage froin the that China appeared likely to split Kemmerer Mission has been pub- to income tax de
look ahead in regard to the silver drop in exchange which, by putting in two and plasis were actually lished. containing schemes inter duction) -------11,702,657.14 exchange. It is difficult, na I have up silver values, assisted those who made for setting up a rival governalia for the adoption of 'n gold Transfer to Bank Pre-
already intimated, even to hazard had stocks to liquidate, and the meat in the old capital. By Sep- standard for China's currency. Au mises Account) 1,000,000.00 agus but let us examine a few trade of the Colony as a whole tember, however, the tide had turn initial move in this direction was Transfer to silver re-
of the more encouraging factors in
survived the adverse conditions ofed and soon the war was brought made in the month of January whore 100,000.00 the present situation. The low the year with a good measure of to an end by the intervention of the collections of import duties was
price of silver must tend to increase success. China, on the other hand, Marshal Chang Houch Liang, the placed on gold basis. This' ar the consumption demand since it--especially in the northern pro Manchurian ruler, who descended rangement Furnishes the Govern -3,429,083.38 | stands to reason that when a cur- vinees-had to cope, with an ad-on. Peking for Peining as I should ment with subatantini gold credita
rency falls in value R greater ditional hindrance to trade in the now call it) and forced the allies of great value in present conditions. 816,531,050.52 |- uniquat is required to meet current form of civil war and all its attend to retire. Generals Yen and Feng for meeting their overeens debts.
requirements," This inct has already ant evils.
quickly gave up the struggle and made itself visible in the large The Premium on Our Exchange,
Judged by the Customs revenue their troops are being disbanded or increase in the circulation of bank- tolnis for the year, there was a incorporated into the "national" When my predecessor addressed notes in China nad. to a still further decline in the gold value, forces. you last year there was much dis greater degrée, in this Colony Low if not in the bulk, of China's ex- Serious Effect of Chinese Wars, cussion about the premium which prices must also in courte of time parts and imports, though of no
At this point let me interpolate then existed on our exchange over discourage production. There is vere serious proportions. The the laying-down cost of British Intly the effect of restored peace British piece-goods trade for the which I not infrequently tree realment, and of commerce and shipping
remark concerning a certain view dollars. This premium. I am glad in China which if it continues, isyur in cottons and to say, has now disappeared, but a factor in the upward direction, through Shanghai largely consisted that foreigners exaggerate the in woollensed in the Press. It is to the effect the process of getting rid of it since, by atimulating the movement in the liquidation of stocks, the Fortance of wars in China whieli, was somewhat protracted by reason of goods in the country and so divergence between home manuine it is alleged, are really not so of the weakness in silver and by cessitating an expansion of turing costs and the prices obtain-vitally important because they affect optimistic feeling among im China's currency, it offers a strong able for the finished goods in China a few provinces at a time and only porters that exchange must rise.
pillar of support to the silver being such as to discourage replace a small minority of the total panuts Innrket. In the early part of the year a
ments. With the demand for cheaption. This is a view with which I committee, was appointed to look
priced materials, British manufae find it quite impossible to agree. into the currency question of the
turers are feeling ever more keenly The proportion of China's millions Calony, but though the report has
the competition from Japan and directly touched by the clash of con- of Haikwan Theis 180,000,000, showg The Customis collection - for 1930. Governmental not so far been made public, it is silver.
action is
tending armies may be compare an increass of 18 millions/over 1929. doubtful if any useful discoveries also, of course, in very important Chinese Industry and Rallways, tively small but there is only part of This represents an 18 per cent.. were made, the original cause of factor. As to this last we can only In engineering products there has the story. Wlint must be remem. The Report and Statement of the committee's appointment, ris,hope that the obvious damage to the been n certain demand for textile bered is that vastly greater mum terms of gold, the value of the col increage, though translated into Accounts having been in your lands the above-mentioned high premium world as a whole caused by the and electrical equipment,, in the hers are ruined by the indirect contentious 12 per cent. less, then for some time I will, with your per- en our exchange, having soun heen collapse of silver will induce the supply of which British manufae sequences of the war-the crushing in the previous year. To the in- mission, take them ne read. lost sight.of in the heavy Inlls in Government concerned to stay their turre appear, I am glad to say, to military taxation, wrecked COFA ereased revenue the port of Shane- After making full provision for sterling quotations which followed hand from any measures calculated be holding their own in spite of the munications, the stimulus given to hini contributed, 17 million trets losses and contingencies the net each other with alarming rapidity,
to make the position worse.
difficulty of necting foreign prices banditry and the destruction of and. Canton 3 millions. Tientsin. profits for the yene amount to The question which took its place various schemes for international Industrial development as a whole confidence generally. More than on the other hand, showed a da 820,720.730 or some six and a half " how low can the dollar goi" it action to stabilize the market, of is receiving close attention in this, the reconstruction of the cour million dollars more than in 1920, is, of course, impossible for me to
which we have heard so much lately, China in both official and private try is held up by tha diverting to and Dairen also registered a de- cresse of 3 millions, while Hankow while expressed in gold they show
none would appear to have reach-eireles, and I think it is safe to purposes of wer of the Government's anly a decrease of about £18,000 In commencing my survey of theed as yet the practical stage. All say that, given the benefits of resources and energies aard by the in spite of the fact that the canver, past year as usual with a review uch schemes involve a sacrifice to peace, it will go and rapidly, check imposed on all public enter sion rate of exchange has dropped of the silver market, I am con presnt a difficult problem in find for imported machinery and equip.
be made in the general interest and carrying with it a steady demand | prises. hy 32.60 per cent. The substantial
scious of dealing with a subject irense in the silver revenue is, which, from being the field of the how to provide for a fairment. The same applies, to the of course, largely due to the von-
apportionment of "luss among the railways which are crying out for version of our gold earnings at the
countries concerned and to avoid relubilitation of the existing lines that any low rate of 1/1, it, would have
pne sectional interest and for constructional progress. been even greater but for the fact
should obtain the lion's share of shall refer shortly to the plans for the fact that the rapid de- that owing to adverse circumstances cline, and still more, the constant
the profit.
devoting the British Boxer Indem we have not had the assistance from errtainty, in the sterling value
A I will now give a few cetinted it ful to this purpose. A understanding between Nanking increase of revenis of some 103 some of our gold-earning branches of silver, has gravely dislocated. Fares showing the silver situation tinn meanwhile which we might reasonably have that section of the world's inde for 1830.
is progressing On the production, silen ubstantial, number of aero expected.
Shareholders present were the Hon. Mr. J. Owen Hughes, the Han, Mr. W. E. L. Shenton, Mesarą," G. C. Moxon, G. H. Potts, Fung | Kong Un, K. S. Morrison, Wong Ping Sutt, O. E, H. Benvis, J. H. Seth, P. S. Cassidy, E. 1). Kutewall, A. Stevenson, W. E. Smith, Paul Lander, S. Seth, Ho Wing, A. F. Judd, F. W. Stapleton, J. W. C. Tonnar, I Chùng Wan, G. K. Hall- Putto, G. G. N. Tinson, S. 11. Churn, A. H. Whits, Chua Seng Chan, W. Allen, D. Landale, A. G. Carin, Dr. H. Balean, Mesars. G. E. Brown, A: M. L. Soares, A. Nissi, R. A. Dastur, J. T. Bagram, J. Dalziel, J. D. Butcher, 1. J. Lewis, John, Fleming, J. M, Cooper, J. M. de Castro-Fasto, H. Aires, E. H. Sumners, D. H. Dixon, Coulthart, H. H. H. Priestly, F. M. Ellis, D. Vaughan Stevenson, Chan Lim Pak. Chan Sin Ming. L. G. 8. Dadwell, and E. S. Abra- Jam.
THE CHAIRMAN'S SPEECH.
The Chairman said:---
I say with little fear of contradic-
in the annals of banking not only
in the Far East but throughout the world. In Hong Kong and Chius
|
anner.
list, has lately become a matter of universal interest and due This state of affairs is
congera.
depression.
mental facts.
These are some of what may be called the natural forces in opera tion in regard to the price of
Of the
from native mills.
Nanking and Mukden,
Maritime Customs. The Maritime Customs duties," now greatly augmented under the new tariff, continue to provide, the mainaqurge of national revenue. The interests alike, of the Govern
the gravest misgivings were caused are closely bound up with the inte grity of the Customs servies and by the seizure fest summer of the Tientsin Customs by the Northern faction in whose hands it remained for four months. Happily Marskal Chang on obtaining control in Tien- tain restored the Central Customs authority.
line."
'.
The New Tarifi, Although falling outside the period under review, I must make mention of the introduction on the To return to the situation; as first day of the current year of a soon, as the war was over, Marshal new Custonis Lariff replacing the Chang Hauch Liang visited Nan provisional schedule which itself king where a general agreement was had succeeded to the flat 5 per cent. National Government. effected between him and the The new tariff-which I may mẹn- real tion is calculated to produce ani and Mukden is the best guarantee million taels-has been on the whole against the renewal of civil war on not unfavourably réceived by mer- which is based on an exchange be we have 244 million fine ounces of planes. for both civil and military the North aide of the Yangtare cantile interests. Simultaneously. zween silver and gold currències: new output, 29 million ounces from. use were imported in the course of Whether the present agreement will with the change of tariff, the Gov- tion that the past year proved and so has added materially to the sales as the Indian Government, 22 and-Hankow services have function stand the strain inherent in such eraugnt has ordered the abolition
the year. The Shanghai-Nanking itself to be one of the most difficult present causes of general economic million from sales br France of [ød régularly and plans are said to iad side, it is somewhat early to The new substitute, taxes should at
demonetised coin. and 20 millicl
compacta, particularly on the finan, of likin and other irregular taxes,
Let us glance first at the funda- | China. This gives a grand totainn air line to Berlin rid Siberia 843, but the signs on the whole are least have the advantage for mer-
ounces from similar sales by Tada. be complete for the operation of Silver has fallen of about 3th; million fine ounces
favourche and, if China survives chants of being a fixed and deter- under Sino-German management, not only were we faced with the nearly 40 per cent, in, price during put onto the market, On the con. In the supply of aircraft, as of this spring without a fresh,brench | fainable charge entastrophic collapse of silver but the past twelve months and remain surtion side. Tudja imported 10
motor-cara, American firms retain a of the peace, we may hope that the The Balt Revenue has now in the also with difficulties of very great on the down-grade Regarded as million ounces, and China and Hong
decided lead.
cerder is turned and that the phase main returned to the control of moment arising from economical or
of civil warfare which has now the Central authorities from loan political cansos. It, therefore, gives in which all the metals have shared, create over the previous year of 20 part of a general price movement Kong 130 millions (showing an in-
The Yangtass
lasted for two whole decades will hands it had almost entirely escap me the greatest satisfaction to be this decline is nothing extra million ounces in the case of India tate, instead of thriving from the
The export trade from the Yang at last be at an end.
ed a few years ago. List year; ib. able to come before you today ordinary and, other things being and a decrease of 13 millions in favourable exchange, showed an ex- the results of the Plenary Session ficiencies in the quotas remitted with such an excellent shoxing, equal, we might count on a corre
Such confidence is strengthened by approached $150,000.000, making a good second to the Customs. De- THEATRE ROYAL reflecting as it does the highest sponding reaction when commodity toe cap of China). The total ax. ceptionally bad record, This was of the Kuomintang Central Execn by the Districts, for the service of credit upon our Chief Maunger, price improves. But silver is not be estimated at 5 million ountes, partly to the decline in selling autumn. It was there decided to Revenue have been made up and the ress, of production for the year may partly owing to civil disturbance and five which net at Nanking last foreign loans secured on the Snit
·Managers and Agents.
merely a commodity; it is also amply sufficient-when taken in con- values abroad which outstripped the conyoko a National Convention to Although fully warranted by the medium of exchange, and looked junction with trade depression and fall in exchange. The Manchurian met ou May 5. The calling of this liquidation of accumulated acr figures before you, I may say that at in this light its prospects are falling, voinmodity prices-to se- bean crop was found to be alanost Convention (or People's Conference has proceeded in panelister a lo view of the still critical state less reassuring. The silver-using count for the phenomenal weakness unleable and silk fell by almost 4 it is also exited) auguste vance of the Finance Minister a of the world's trade and the many countries have rapidly diminished dancers and difficulties which still in number and nor Chitin remains of the metal. The measure of this half its value in spite of a poor charge made by thrir opponents plan. Recognition is due to Mr.
weakness in given by the more or harvest confrant us, we considered very the only important - one "on
less steady drop during the course
ngainst the Nanking Party af mono Soong, whose concern, for China's carefully as to whether we were silver-currency basis. Still the out-
foreign credit-and, if one may polising power and of opposing venture to add, able tenure of his Mrs. BOTTLE justified, in recommending the same look is not so desperate if the ex
popular control. If the decision is dividend and bonus as last year. I change value of silver can regaman since, a fali ol pence. The centred attention on the trading, much to remove the cause of tric high opinions in financial.cireles We retain, however, a sufficient de-
The trade depression.at home has honestly carried at it could do very difficult oflée-have earned a degree of stability. Experience Shongbai exchange declined corressibilities of China. This, comtion and jealousy which have kent abroad. gree of confidence in the future and bannily shows that adjustments to spordingly from 2/1 to the thelbind with the special distress in I trust that you will approve of prien variations are made with óar recommendations.. Let me men-
to 1/4 these being, it is curious the Lanenshire. cotton trade, led to nationalist China in a state of dis greater ease of Oriental countries tim here that our iner-ased invest than by the more highly developed to note, actually the first and last the despatch of an Economic Mis Union during the past two years.
officon! rates quoted in the year, sion sont by the British Govern ments stand in our books at a very countries of the West. It is also
Red Armics.. ment to enquira_into_trading_eon)
the railway loans continue to meanb“" vonsiderable margin under market comforting to remember that trade
India.
ditions in the Far East and the There remains a formidable prob up the amount overdine on three prices. .
is, in the last analysis, barter and
Turing now to Eastern trading best means of advancing the Britishlem calling for all the energy and loans alone issued wholly or partly I think we live every reason to
is bound in the long run to recover
conditions during the past year, it share. After four months of most, determination
which
President in Great Britain amounting now congratulate ourselves upon the its quilibrium, whatever the level
Privato choice which we made some twelve of monetary exchange. We may find superfluous to mention that the thorough and painstaking inves Chiang Kai Shok has shown himself to almost £8 million.
countries with which we are con- tigation: Sir Ernest Thompson and to possess in ample measure. I foreign ereditors for railway mate-:" months ago in nonointing Mr. Grav consolation in the fact that China's
nected havo shared without exoda his colleagues are at present in refer to the Communist mennen. rial are also still awaiting the bay- barn Acting Chief Manager. He real purchasing power resides notions in the general world depres this Colony engaged in preparing For the last two or three years ments due to them, but we are glad has already plowed this exceptional tuber silver but in her surnudanskport We Do the lares para of Central and Southern to learn from accent statement capacity for the post and we had merchants her
fxperienced, particular troubles, of Mission's visit firstly because of the Chinh have been ravaged and held in the the Houch of "Confions The no hesitation in confirming hijn in hides and other exportable pro
their own of a political er economic valuable personal contact between in terrer by so-called Reil connretion with the remission of the his appointincot some six ruchthe ducts
nature which have placed an ad- British merchants in the Far East armies, consisting of bandita, dis British Boxer Indemnity that our Sue is the long view. In tho・ "ditional check on trade and ente- and theso representatives of the handed soldiers and ruined and de ·(Continued on Page 5.3 ***
ART
AND
, 10, 13 and 14 March
At 9.15 PM.
11th March, at 5.15
Booking at
ANDERSON'S
ago
of 211 pence per ounce to 141 pones of the year from a maximam figura
The Economic Mission,
4
Ralways.
In contrast to the Custoins jand.
Salt abligations, the defaults.cöpl.