HONG KONG & SHANGHAI BANK REPORT
China Trade Cannot Go
Further Downhill
DECREASE IN SILVER CONSUMPTION
China And India Using Less Of The White Metal
THOSE PRESENT
Those present at the meeting were:-Mr. T. E. Pearce (Chair- mani, Mr. T. H. R. Shaw (Deputy Chairman), Mr. W. H. Bell, Mr. A. H. Compton, Hon. Mr. C. G. Mackle; Mr. G. Miskin, Mr. K. S. Morrison, Hon. Mr: J. J. Paterson and Mr. J. P. Warren Directors, Mr. V. M. Grayburn (General Manager). Hon. Sir Henry Pollock, Messrs. J. H. Taggart, P.. 8. Cassidy, A. B. Raworth, Wong Ping Shun, G. G. N. Tinson, G. de la P. B. Fitzgerald, S. J. Deeks, N. V. A. Croucher, A. Stevenson, Lo Chung Wan, C. E. Brown. R. A. Dastuc. J. Fleming. A. Murdoch, S. T. Williamson. G. A Middleton-Smith. F. E. Joseph, Choa Seng Choo, P. M. da Silva, Chun Wing Keu, H. Gittins, H. Skott, A. C. Kennedy, F. W. Stapleton, H Dixon, F. H. Kew, D. O. Russell, W: J. Keswick, W H. S Derit. Fung Kong Un. C. C. Knight. H. R. S. Law, J. D. Danby, H. S. Hills, Chan Lim Pak. Mr. and Mrs. L.. N. Murphy and others.
Mr. T. E. Pearce Reviews
Year's Working
Another year has passed, leaving behind a gloomy picture of the world buffected by the waves of depression. The picture looks different in every country, but we are thankful that there are definite signs of an abatement In Great Britain and that there is a moderately optimistle feeling everywhere," said Mr. T. E Pearce. the chairman of the Hong Kong and Shanghai Banking Corporation, in the earse of his report for 1933 at the 118th annual meeting of the Corporation, which was held at the board root of Messrs Jardine, Matheson & Co. Ltd, on Saturday morning.
After making full provision for losses and contingencies, the net pronus for the year amounted to $15.26024.73, a reduction from the previous year of nearly $17 lakhs as quoted in local cur- rency but a moderate increase in Sterling, due to the higher rate of exchange at which the accounts were taken, over.
In his report, the Chairman gave a comprehensive review of the trade conditions in China in particular and in the world in general. China, he said, was struck by the depression later than the rest of the world and, qwing to the depreciation of cur-" renties elsewhere and to the political troubles which had be- fallen hur. it was to be feared that her recovery might be ce- layed.
An alarming decrease in silver consumption by China and India was revealed, no less than two thirds of the world supply of silver having gone cut of the market.
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Heterring to the political conditions in China, the Chairman said: "I une tried to look at China from a detached point "of view of a person with no particular knowledge of the Far East, it would. I think, seem a strange and chaotile picture. An un- declared war with a neighbouring country, civil war in several provinces and a vigorous military campaign against a communist rebellion; all going on at one time or another," or, even at the same time-this is the picture in miniature."
1933 A DISAPPOINTING YEAR.
1
Although the Chinese had an amazing way of localising their interunt orders, 1933 was nevertheless a disappointing year." Much was expected in the early part of the year from the League of Nations' intervention in the Sino-Japanese dispute. and later on there were occasions when it seemed possible that the leaders of the country would subordinate their personal feel- ings and ambitions to the good of the nation, but in Both cases nothing came of these hopes.
Reverting to the financial position of China, the Chairman said that although no revenue was received from Manchuria dur- ing the whole year, it was satisfactory to note that the Cus- tomas revenus were nearly $20 million: higher than the previous
year.
TRADE CONDITIONS
Dealing with trade conditions in China, the Chairman re- marked that, taking into consideration of the exclusion of figures respecting the Manchurian ports, the total foreign trade of the country in 1933 had decreased some 7 compared with 1932 and. some 33 as compared with 1931 which was a record year. How- ever. In view of the notoriously depressed state of the staple Chi- nese industries, it was surprising to note that the export figures excluding Manchuria-actually showed an increase of 7 over 1932 though it must be remembered that exports touched a very low level that year. Taking a broad view of the trade in China, the indications seemed to point to the fact that pro- vided external conditions got no worse. Chima trude could hard- ly go further downhill.
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Mr. Pearce said: Ladies and Gentlemen :--
The Report and Statement of Accounts having been in your hands for some days I will, with your permission, take them as read.
After making full provision for Josses and contingencies, the net profits for the year amount to $15.206.824.73, a reduction from the previous year of nearly $17 lakhs as quoted in local currency but a moderate lucrease In Sterling, due to the higher 'rate of exchange at which our accounts are taken over.
After deducting the interim dividend pald at 1/4.1/2 and Directors remuneration, the amount available for distribution is $11.592843.93, which it is proposed to deal with as follows:-
$6,630,215.83
To pay a final divi-
dend of $3 per share subject to deduction of In: come tax) Transfer
Bank Premises Account 1,500,000. Carry forward to
new Account ... 3,482,728.10
to
Us in our temporary premises since, like the man at the piano. the staff is doing its best.
Hong Kong and Shanghai Banking Corporation's new home. When completed it will be one of the most up-to-date buildings in. the East.
DECREASE IN SILVER CONSUMPTION" Taking the 7 years up to the end of 1930. on an average India and China
together consumed about 80 per cent of the world offerings of silver, say about 200 million nothing
ounces per annum
vention in the Sino-Japanese dis- pute, and later on there were oc- casions when it seemed possible that the lenders of the country would subordinate their personal feelings and ambitions to the good of the nation, but in both cases came of these hopes. This consump-During the first five months of tion dropped in 1931 to 118 milion
the year North China by which ounces, in 1932 to 62 million I mean the Peiping/Tientsin area) ounces, and now in 1933' the Indian
was in a state of turmoil, but since consumption is estimated to be 10 the end of May, when a modus million ounces, while Chira is es- vivendi Was patched up with timated to have exported some 15 Japan, things up there have been million cunces more than she Im- comparatively quiet. ported. So we find the consum- mers of two-thirds of the world supply of silver have gone out of the market, and although the pro- duction of silver has dropped from on average of about 240 million ounces to 163, the total offerings of
YANGTSZE VALLEY "Fortunately the important trad- ing areas of the Yangtsze 'Valley and the Canton delta navé throughout the year been undis- turbed by political changes.. Nevertheless the communist, en-
WORLD DEPRESSION Another year has passed, leav- ing behind it a gloomy picture of the world buffeted by the waves of depression. The picture looks different in every country, but we are thankful that there are definite signs of an abatement- in Great Britain and that there is a moder- ately optimistic feeling everywhere. The trade cycle is perhaps slowly and steadily revolving upwards, and while certain factors, such as the experiments in the United States, the unsatisfactory political situa- tion in Europe and the tension in the Far East may act as a brake. yet the up-grade movement seems likely to continue on its way to- wards a brighter future. As re- gards the United States, whether the monetary pelley of that Gov- ernment constitutes a serious dan-j ger to this improvement or not it is difficult to say. It has at any rate been and still is a disturbing factor which has made the ex- change bankers' position a very difficult one. Artificial methods of currericy depreciation lead to arti-silver last year reached as much ficial rises in price and to reactions
as 273 million ounces which is not Some of you may think that our
very much under the average sup- appropriation to Bank Premises.iving rise to political as well as
economie dangers. To rid the ply of the last 7 years. The con- Accourt is on a generous scale, but
world of the lack of confidence sequence is that over 150 million your Directors feel that in view of which is hindering business some
ounces of the supply of silver re- the cary expenditure involved in
for and degree of stablisation of currencies main unaccounted
are putting up our new head office. It is urgently required. In the Far presumably in the hands of is a wise policy to write this ex- East the strained political rela- speculators. penditure down as liberally
tions between China. and Japan
You will, I think appreciate that possible, You have recently seen the demolition of the old Bank disquieting factors, and it is of the and between"Japan and Russia are
the present state of uncertainty due to the possibility of the sud- den adoption of some governmental measure which might overnight change" the whole outlook, makes the trader's position very difficult and adds very materially to the burden of the exchange banker.
If we turn to the West of China On April 6th last the use of the tael as a medium for official, com-
we will find that in one or another part owing to the depreciation of cur- mercial and legal transactions in
of Szechuan there was rencies elsewhere and to the poli-China was declared to be null and
throughout the year almost con- tical troubles which have befallen vold, and the official rate of ex- warlords or between warlord and tinual fighting either between local her. it is to be feared that her re-
change of 715 to the dollar was communist-brigand forces, In covery may be delayed. But much fixed. A.new standard silver dollar Chinese Turkistan, on the Tibetan depends on certain imponderable is being produced at the newly-frontier, and in the North-Western considerations amongst which opened Central Mint at Shanghai Provinces, there have also been sliver takes a prominent place. under the supervision of a strong disturbances of fluctuating in-
International committee.
$11,592,943.93
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which has housed our business. lo 50 years. Built in 1884 it was call-
ed
utmost importance that interna- tional diplomacy should bring moderating and statesmanlike in- Auences to bear.
CONDITIONS IN CHINA The depression struck Ching la-
"Jackson's Folly" because it seemed SO unnecessarily large. There have, however, been many changes in the East anrl so much expansion In our business has taken place in these 50 years, tatter than the rest of the world and, the old building has lacresly proved to be too small. The City Hall and Theatre having reached a state of dangerous decay, we approached the Government and came to terms
for buying Wardley Street and part of the City Hall site. We hope that in something under two years the new building will be completed and that we shall then be, able to offer every comfort and facility to "our constituents. In the mean- time I would ask for patience with
A photo showing the old balding in the early stages of demolition
Three years ago your Chairman in reviewing the position "of silver expressed the hope that "the gov- ernments, concerned would stay their hands from any measures calculated to make the position worse." We still hold the view that from the point of view of China, governmental interference, alming at bringing about an arti- Acial rise in silver, will almost cer- tainly do more harm than good, and for this reason we did not applaud the Silver Agrement reached at the World" Economic Conference in London. It set a precedent for attempting to con- trol the supply of silver, and though its effect on values has been and is likely to remain small owing to the comparatively small quantity with which it deals, the fact that a successful international agreement has been reached, pro- viding an artificial, silver market and restricting the free play of supply and demand." is encouraging to silver speculators. The depre- ciation of currencies throughout. the world has had the effect of raising proportionately the price of silver in terms of those cur- rencies and concurrently has put up the price of China's export commodities. It is an ominous sign that China should be begin- ning to export silver to pay for her imports. If we glance at a lew Agures the position will be clearer.
CHINA'S, POLITICAL
CONDITIONS Before I turn to deal with trade conditions in the various countries in which we have interests, I pro- pose to make a few remarks on political conditions in China during the past year as these conditions always, have serious repercussiona or trade.
If one tried to look at China from the detached point of view of a person with no particular know- ledge of the Far East, it would. E think, seem a strange and chaotic picture. An undeclared war with a neighbouring country, civil war in several provinces and a vigor ous military campaign against a communist rebellion; all going on at one "time or another, or even at the same time-this is the picture in miniature. But those of us who have lived out here for some years regard such conditions
as being almost endemic, and. we are able to discount much of the distur- bance, since we know from experl- ence that trade will go on and that the Chinese have an amazing way. of localising their internal dis- orders...
Nevertheless it is not a cheerful task to look back on a year of dis appointment such as the past. say disappointment because early in the year much was expected from the League of Nations' inter-
I
clave in Klangsi has been a con- stant menace. Their forces have continually. harassed the troops of the Generalissimo. Chiang Kai- shek, and they have also made bold and successful raids into the pro- vinces of Kwangtung and Fuklen. General Chiang was at one time
to send handicapped by having some of his best troops up to the Great Wall, but he staged a vigor... ous offensive in the autumn which made some progress but was finally held up In consequence of the Fuklen revolt in November,, which however crumpled up before serious consequences arose.
asity, as also to a lesser extent In other provinces of China pro- per.
Continued Overleaf
The Statue of Sir Thomas Jackson as seen through the Des Voeux Road entrance of the old Hong Kong Bank.