HONG KONG DAILY PRESS,"
» MONDAY, FEBRUARY 28, 1938.
EXCELLENT RESULTS IN
is proposed to deal with as follows:
on
To pay a final divi- dend. of £3 per share "(subject to deduction of in- come tax) Transfer to Bank
Premises Carry forward to
New Account
$7,744.537.82
1,000,000.00
3.383.004.53
$12.127,542.35
The figures of our Balance Sheet
الى
FRIENDLY UTTERANCES
we
CRITICAL PERIOD,
CHINA'S FOREIGN EXCHANGE
of
SAYS BANK CHAIRMAN
course
moreover,
geen
We must
p
on the
and
and
of the Mercantile
appreciation of us all.
COURAGEOUS LEADERSHIP
now publish at stated periods the would have to take place before a number of factors assisted to- The Chinese Customs Revenue difficulties of this Shanghal pro-Messrs. Jardine Matheson and Co. I well remember our
the British
Chief
Central Executive Committee last International Red Cross organisa-quoted on the London Stock Ex-something about Shanghai since has
many vicissitudes in their serious repercussions
(Continued from Page 1)
February confirmed that line of ions at Shanghal and Hankow change and it was thought, early its status is likely to be a pro-China A few months ago our complications, and it is to be
1in the year, that it might shortly minent subject once
fn Shanghai again
Manager. action. which had already been also deserve liberal support.
Mr. A.B. hoped that those controlling the After deducting the interim
made one of the main planks in should further like to express a be possible to bridge the hiatus incoming months. This is a matter Henchman, "commented that he destiny of these ancient Empires dividend of £400,000 pald at
the policy of the Kwangsi leaders word of sympathy to the relations the London issues of Chinese loans which is of very great importance found it extremely difficult to see will be able to arrive at an early 1/25/8 and Directors' "remunera-
and of the Communists. From of the members of the British which had existed since the Re- to all foreign business interests in the wood for the trees. He was solution of their differences, tion, there remains available for
The Shanghal We have Jeen the trying to take a long view and I distribution $12.127.543.35 which 11that time on it seems that the forces who lost their lives while organisation Loan of 1913.
TRADITIONS MAINTAINED influence of those who wished for serving at Shanghai and to Sir Minister of Railways first initiated neutrality, of a part of the Inter-think you will ag.ee that it is compromise and delay gradually Hughe Knatchbull-Hugessen at his discussions regarding the possible national Settlement violated dur-not easy for us at the present. Your remarks, covering the Cus- waned. An understanding was misfortune in being seriously flotation of loans for new railway ing the recent fighting. This moment to see clearly through the toms, Salt Administration reached with the Communist army wounded when travelling froin construction in China, Sub-would probably have been avoided dense forest of gloom in which Railway Administrations which are and the way was prepared for ac- Nanking to Shanghai on official [sequently, when Dr. Kung was in if intervention had taken place in China and Japan stand. On both so deeply woven into the financial
on by a united China as soon as duty.
London for the Coronation cere- the early stages and thereby sides there are dangerous ten-fabric of China, are especially In- the need should arise.
monies, negotiations for the build- much loss of life and property dencles and pitfalls.
teresting, and it is pleasing to note Ing of a railway from Canton might have been saved. The more warily, keeping our eyes that assurances have been given At a time like the present for across Kwangtang to Melhsien value of the existing Settlement open, ready to welcome and take regarding these interests which You will remember that carly in obvious reasons it is impossible for made progress. At the same time regime cannot be questioned: one advantage of the first ray of light are so international in character. the year the liberal and friendly those outside Government circles Dr. Kung also breached the sub- has only to visualise the situation MERCANTILE MARINE PRAISED With you, we do realise the heavy tone of the utterances of General to make any reliable statement of Ject of a loan to be used partly to had there been no Settlement at
responsibilities. placed on the Hayashi, then the Japanese Prime the currency and financial position provide additional assistance in all to get justincation for its It is helpful and cheering (
shoulders of Sir Frederick Maze, Minister, and of Mr. Sato, his For- of China, or for that matter of the stabilisation of the Chinese continuance in an unimpaired that His Majesty's Gover at and we sincerely hope that he will eign Minister, caused a feeling of Japan. Wartime conditions pre-currency and partly for the re-form. If and when the Powers are keenly observing cal be able safely to pilot all the inter- have been converted at 1/2.7/8, the optimism in regard to the develop-vall and must be faced with a funding of L portion of the are prepared to negotiate and events out here and are prepared national interests involved to A same as lost year, so a comparison, ment of relations between the two realisation of the dislocations domestic debt. We were consult-agree upon some new regime for to support British Interests as and successful issue.
countries. In China Itself there which they mean. is an easy matter once more.
noShanghai, then However, dueled about this matter but
Trude can the 'when necessary.
I am particularly pleased to note COLONY CURRENCY SOUND.
were signs of stability and progress credit must be given to those who agreement was reached. We were. situation will be altered, but in flourish only when condence and
your reference to those who "go such as had not been apparent for have directed China's foreign ex-
and are, bound by the agreement the meantime it seems to me and enterprise go hand in hand. It The principal change is in our many years. The outlook was, in change market during the year. of 1920 between the International to your Directors that, as a result the policy of His Majesty's Gov-down to the sen in ships": there are also many others serving on engenders note issue which has increased by fact, hopeful though were Stability has been maintained, and Consortium Group of banks, so we of the recent events at Shanghai, ernment
confidence.
this Coast besides those mentioned some $72.1/2 million and. is shown aware that the cloud of Sino- in fact during the early part of naturally sought the views of the we have sufficient cause to call for then the Far Eastern merchant this year in two amounts. while Japanese distrust still hovered in the year, as threats of unorthodox other groups in regard to both a strengthening rather than a can be trusted to show enterprise. you, and one and all have faced their arduous duties in a manner the other side Hong Kong an ill-omened way on the horizon. financial experiments were warded these projects. They of course weakening of the present Muni-As an instance I should like to which certainly upholds the high- Government Certificates of In- It is doubtful if this cloud could off, the new currency gained in had to be left in abeyance when cipal Council Administration draw attention to the initiative est traditions debtedness show as a separate item have been dissipated even with the strength and merchants showed the Sino-Japanese conflict com-There should,
be and enterprise displayed during Marine and deserve the greatest of just over $170 million as cover best will in the world. An accu-increasing confidence. There was, menced
guarantees which will ensure the these critical months by the two for our excess issue.
mulation of aggravations made it of course, valuable co-operation on
atrict observarice of neutrality, in leading shipping Arms CHINESE CUSTOMS REVENUE storm the part of foreign banks. Moreover,
regard to its The Hong Kong Government almost inevitable that a
boundaries. The China coast and Yangtze River-.
condition of the currency fund, the air could be cleared. But I wards equilibrium in the balance in 1937 amounted to no less than blem are immense, but they de-and Butterfield and Swire-whose from which it can be seen that do not propose to detain you with of payments: commodity prices $342 millions, an increase of $18 serve the close attention of the staffs, in gallantly keeping their Manager stating at the opening well over 100 per cent. cover is any comments about the causes were still rising: there had been millions over 1938, thanks to the Powers whose responsibility it is services operating, have set a ne ceremony of this building over two held by them against the Certi- and origins of the war (let us be two years of bumper crops: inter- excellent start given in the first to obtain at any rate a satisfac- example, worthy of the best tradi- years ago that the Barik up to that ficates of Indebtedness which we frank and call it war outright). nal conditions were quieter than seven months of the year. You tors modus vivendi if an agree-tions of
mercantile time had found nothing too small or too large to deal with; sub- hold. It is not only a great satis- Our Bank is in a delicate position for some time; the opening-up of are aware that negotiations are ment on a permanent basis can-marine.
sequent events have proved with faction to your Board to know that because of its interests in all parts the country was increasing the proceeding in regard to the Cus-not be found just yet.
vengeance that there was & our ability to the public is so of the Far East, and at critical circulation of banknotes; arrange toms tariff and administration in well secured but also that the cur- times like these the old proverb ments for the formation on sound the areas controlled by the Japan-
At the present moment the out-great deal more than the ordinary Banking facilities necessary to rency of the Colony is in such a "least
soonest mended and modern lines of a Central ese forces. It is hardly necessary
And now to turn away from too is cheerless. and it is easy
to become depressed at the pro-recently experienced, and we do meet the abnormal conditiona sound condition.
proves its aptness. The easy and Reserve Bank were well advanced. for me to emphasize how Import- China: Other changes in the Balance rapid transmission of news from and a fresh attempt at budget ant It is that the Customs Ad- Here in Hong Kong we
have pect of a long series of difficulties realise the courageous maner Sheet have not been very startling: one end of the world to the other control had been initiated. Such ministration should remain ay now been fortunate in that the mis-in China, but I have tried to show which Sir Vandeleur Graybum has Bills Payable are up about $6.3/4 is sometimes a mixed blessing. was the situation when in July constituted, and continue to be fortunes of China have not so far you reasons for not regarding the dealt with all matters appertain- million, Current Accounts up $51 Too many spokesmen are in fact the first signs of a serious conflict the sole" instrument controlling had any ill-effects on the Colony Foreign trade in the Far East has to the successful carrying on million, while Fixed Deposits are quite as bad as too many cooks.
were scen. In August, "when the Customs affairs throughout the In fact, many of our local indus-
of trade in its varying degrees. more than anywhere been bullt down $29 million.
fighting broke out at Shanghai whole country. The present ad-tries have made satisfactory pro-
We are especially pleased that His and bombs tell in the business ministrative system has weather-gress during the year. It is how-by enterprise and by a read!- centre of the Settlement, it was ed political upheavals and civil ever certain that for real and ess to face with courage obscure Majesty the King bestowed upon him the honcur of Knighthood over many years and the lasting prosperity the Colony must confident that the British will lead sered-we know that he is pro- necessary to take steps to pre-strife
I am which we feel was so richly de- million. Bills Receivable up $46 Situation was during the first half vent a panic, so restrictions were maintenance of its existing status rely upon norimal and sound trade the way tackling the new problems ceeding at an early date to Eng- million, while Loans are down $26 of the year, Prices were rising, the placed on the withdrawals of de- and credit is unquestionably taling conditions in China and the and the changed conditions which land on a well earned holiday after
improvement in communications posits in the Chinese banks. the advantage of both China and present struggle is therefore being we are likely to see by rail, read and air was opening These measures were supplement- Japan, in order that in due course watched with much anxiety.
out here Your Directors are very glad to up the country more and more, ed by what is known as the Wel- the resnancing and rehabilitation
during the next few years. As for wishes will go with him.
his strenuous labours and our best be able to present to you today the standard of living was improv- Wah or blocked currency system, of
In Japan foreign trade has the Bank, it can be counted on the country may proceed
continued to increase in value. to do its rightful share. such a sound Balance Sheet and
Chairman, Ladies and a welcome Profit and Loss Account in the intertor as well as the great of the Chinese Banks to transfer
ing owing to good crop conditions which permitted the constituents smoothly.
The excess of Imports was; at one
Gentlemen. I now formally second LOYAL STAFF THANKED such a time.' All known and
time unusually high, but the im-
the adoption of accounts as pre- er demand for export produce; funds from one blocked account likely losses have been amply pro- furthermore, exchange, both in- to another by means of Wel-Wah
position of stricter import controls
One last word. I think you will sented, and in doing so I wish to 'vided for, and in addition a moternal and external, had never in cheques
I am glad to say that repeated effected a reduction, and the year all agree that we owe our ap-express our thanks to the Board or orders, This proved derate sum has been allocated for
assurances have been given by the ended, according to the published our time remained for so long a effective in preventing any large-Japanese that the foreign loans returns, with the adverse balance members of the Staff who have and his very able Staff, and I
preciation and thanks to the any possible losses which may
period with such small variations. scale panic fight from the cur- come to light later on.
Proof of this entisfactory state of rency though it was subjected to Maze
will be respected. Sir Frederick somewhat over Yen 600 millions worked in China throughout the cannot let this opportunity pass is in a difficult position. The war has of course brought past year. In each China-port realise and appreciate all Mr. A.S. affairs can be seen in the Chinese pressure for some time. Gradual-He is an official of the Chinese its train abnormal conditions
without stating that we fully FAR EASTERN SITUATION
Customs returns. At the end of ly the demand for foreign cur- Government, but as Custodian of trade and dnance and the future been critical moments and difficult Henchman, our Shanghal Manager,
where we have branches there have Conditions in the Far East are July exports had increased 45 per rencles declined appreciably and the revenues earmarked for the must be largely dependent on the occasions which have in today more serious than they have cent. and Imports 36 per cent. as at the end of the year the pro-service of important foreign loans outcome of events in China.
and all those serving in China, ever beer in the history of our compared with the same period in blem was no longer so serious
case been faced with courage and
have been able to accomplish in he has certain The two great nations of 1936. Later Imports and exports
responsibilities In Manchukuo the expansion of ability. I feel you can rest as terests in the face of danger of the way of safe-guarding our in- the Orient are at gripa grimly of course fell off, the former more
which are of an international CHINA AND SILVER" determined to fight it out. All the than the latter, but it is remark-
nature. Bondholders of all coun-trade figures has continued and sured that your interests are in
indications that there are
the good hands.
every description. (applause). efforts made in recent years to out-able that at the end of the year mains dependent on its conversion between strongly conflicting cur- China's Interest in sliver retries look to him to steer a course
cpening-up of communications,
There being no questions the With these remarks, ladies and law war through treaties, pacts and the import and export figures to-
motion was put to the meeting and carried unanimously. covenants have broken down. Sogether yet showed an increase of into a currency reserve fund in rents. We are conndent that with coupled with several years of nor-zentlemen. I beg to propose thei
approximately 9 per
the Report and gold or foreign exchange. Thus, his customary tact and political mal trade, is increasing the pur-adoption of
chasing power of the people. Accounts as presented, and after 1938.
during the year, large amounts of sagacity he is doing his utmost to state monopolies and supervision they have been seconded I shall
OTHER BUSINESS silver were shipped from Hong preserve the integrity of this im- or control of industries and ex be pleased to answer any question Kong to foreign countries on ac-portant administration. As за
On the other side Cash with Certificates of Indebtedness is up 381 million, Securities up $23
million.
Bank.
far from intervening to bring this conflict to an end, the leading Western countries are seen aligned into groups supporting widely op- posed theories, of Government: watching each other intently like
said
THE TRADE OUTLOOK
Let us turn from politics to trade. You all know how promising the
cent. over
POLITICAL BAROMETER LOW
DIFFICULT POSITION
bear
inter-
INCREASED TAXATION :
LOCAL INDUSTRIES
WORLD TRADE CONDITIONS
„OUTLOOK CHEERLESS
future with too much pessimism.
and unknown situations.
said:-
every
Mr.
in
of Directors, the Chief Manager
THOSE PRESENT
Was
The Hon Sir Henry Pollock The political barometer is at Count of China. Last summer Dr. international trustee he deserves change are, however making things that may be asked, to the best of proposed the re-election of the Hon. Mr. M.T. Johnson," Mr. G. H. H. Kung made an arrangement international support. The 'for-increasingly difficult for foreign my ability. (applause),
merchants and the "Open Door"
Miskin and Mr. A.L. Shields to the boxers at the opening of their too low to warrant a forecast of with M.. Morgenthau for the ear- eign powers have in the past is now almost a thing of the past. SECONDER'S SPEECH Board of Directors. This bout Under such conditions Bri-fine weather for merchants in the
seconded by Mr. Chua Seng-choo tish interests in the Far East near future. In Central China the marking of gold against Chinese brought their influence to might well be pictured in the eyes channels of foreign trade are now the agreement of May 1936 under they are, we understand, doing so be faced by the foreign powers man's motion Mr. S.T. Williamson
silver: This was supplementary to under similar circumstances and the coming year the question
of extraterritoriality will have to In rising to second the Chair-and carried unanimously.
The re-election of Mr. J. Fleming of His Majesty's Government as affected as never before since the only a small item in the sum total opening of the treaty ports. Yet, which the United States Treasury now, particularly as the retention
and Mr. HR. Forsyth as auditors Mr. Chairman, Lacies and was proposed by Mr. P.8, Cassidy of the vast interests of the British may I be so bold as to suggest, had already arranged to purchase of the "Open Door" in China de- with interests in the country. Commonwealth of Nations. Never that for this very reason the catas-regular and substantial amounts pends a good deal on the con-
Gentlemen-It is with pleasure and seconded by Mr. L. Kadoorie. theless, the indications are that trophe is perhaps magnified in the of silver from China and to pro- unded existence of an
World trade conditions, and that I. rise to support the Report When put to the meeting it was the importance of the Far Eastern eyes of many. If, as seems likely.vide facilities in United States nationalised Customs Administra-
dollar exchange for currency tion such as exists at the present especially conditions in the United and Accounts as presented, and carried unanimously. question is fully realized, and very the Yangtze Valley continues to stabilisation purposes. No official time.
States, affect in a varying degree feel sure that I am voicing the
The meeting terminated with welcome was the statement issued suffer throughout the spring and
trade in all the countries of the wishes of shareholders in express-the announcement by the chair- summer. the effect on trade in figures are available to show, what
East. Thus fairly optimistic re-ing our appreciation to those at man that dividend warrants would last August at a critical time in Shanghal, which formally promised general will naturally be serious, funds in gold or foreign exchange
The Salt Revenue in 1837 is reports from India are qualified by the helm of this great Financial be ready on Monday (today). "all possible measures to protect but there will be adjustments. A are held by the Chinese Govern- British lives and interests" at that loss here will become a gain there.ment, and while abnormal condi- ported to have been very much doubts as to the state of world Institution, which stands out as s port. We feel confident that when and I do not think it necessary tons prevail we can hardly expect the same as in 1938 owing to fur trade throughout the coming year. lighthouse in the troubled sea of
be made in We shall progress to
the ther increased taxation, but the The rumours spread from America Far Eastern commerce today.
Amongst those present were:- necessary and in face of every to be too "despondent.
Salt Administration has un- inst April that the price of gold
The chairman's speech has been Mr. G. Miskin (Chairman), The difficulty we can count on support have to wait a time for a real re-publication of reliable statistics.
fortunately failed to maintain its was likely to be reduced, had im- of a most comprehensive nature Hon. Mr. M.T. Johnson (Deputy covery, but the recuperative pow- for our legitimate interests.
RAILWAY LOAN SETTLEMENT control over the North China Salt mediate répercussions of an ad-covering in detail the trend of Chairman), Mr. JH. Bousfield, Miz. ers of both Japan and China are Few years have seen such con- great, and will, in due course, be
on the Philippine | Eastern Trade and leaves nothing AH. Compton, Hon. Mr. S.H. Död- At the beginning of 1937 the areas. This Administration has verse nature trasts as the past year in Chins
been in the situation of an ugly Islands and Malaya. The former calling for further comment, and well, Mr. JR. Masson, Mr. K.S. sure. Even now we see how Chinese Government was still and it is a sad task to set about China's misfortunes are leading to negotiating for a readjustment of duckling alongside the favoured was also affected by the labour I feel certain that it will be Morrison, Hon. Mr. 3.3. Paterson, reviewing the political situation developments in the Western pro- certain foreign debts in arrears. Customs, and it has therefore been troubles in America and, as in eagerly awaited by financial in- Mr. T. E Pearce, and Mt. A. La there during 1937. The year start vinces which might otherwise have In April the London Bondbolders rather neglected by its foster fact happened generally through- terests all over the world and be Shields. (Directors); Bir Van- ed so well and ended so different been unattempted for decades. It Committee.
deal parents, the international powers. out the world, in Malaya the last foremost in the important Far deleur M. Grayburn, Chief Mana- constituted to ly. In each of the past few years 13, however, of the greatest im- with such questions, recommend Nevertheless it is important that quarter of 1937, gave a slight set- Eastern reviews of the year.
ger, and the following share- holders:- Your Chairmen have uttered words | portance that peace on reasonable ed the acceptance of terms for a the Customs and Salt should be back to the satisfactory conditions of warming about the dangers in- terms should not be long delayed. settlement of the Hukuang Rali-treated on an equivalent basis as reported prior to that time. must be considered to be highly Mr. A. 8. Adamson, Mr. J. M. herent in the unsatisfactory poll-Otherwise the dislocations will be ways Loan similar to those al- the arguments used in the one In the Philippines increases in satisfactory, especially when it is Alves, Mr. H. J. Armstrong. Mr. P. tical relations between Japan and less easily repaired; there will be ready adopted in readjustment of case apply also in the other. The revenue and trade throughout the noted that a profit of over fifteen 8. Cassidy, Mr. Chua Seng Choo, Chins. Last year your Chairman the danger of other countries be- the Tientsin - Pukow Railway outstanding foreign loans secured year reflect the prosperous state million dollars is shown after Mr. Chan Shu Ming, Mr. N.V.A. stated that relations with Japan coming involved, while both com- Loans. Two United States dolls on the Salt Revenues require of the Islands. but the unexpected paying all charges and dominated the political scene.. He batante may be driven into des-loans were also put on a
making Croucher: Mr. R.A. Dastur, Mr. J. new comparatively modest annual re-statement. made by President provision" for bad and doubtful Fleming. Mr. HR. Forsyth, Mr. mentioned that negotiations beperate expedients which will dead-basis, namely the Chicago Bank mittance of funds and the re- Quezon last March in regard to accounts and contingencies, which Fung Kong Un, Mr. Fung Manter, tween the two countries were, when lock all trade.
Loan and, the Pacific Development venues collected should continue putting forward the date of com- certainly is a magnificent showing Mr. H.R.B. Hancock, Mr. H.S. Hills, Corporation Loan, both dating be ample for these requirements. plete independence had an ununder existing conditions. Heavy Mr. Ho. Wing, Mr. H. Owen Hughes, It is satisfactory to be able to steadying effect. An early soluclouds still make their appearance Mr. J.H. Jessen, Mr. L. Kadoorle, Meantime we extend our deepest work of setting up certain long note that, in spite of the war, the tion of this problem is very desir on the financial horizon owing to Dr. F.H. Kew, Mr. L.M.S. Lloyd, a key-point in Sino-Japanese re-sympathy to the sufferers in the outstanding advances and material National Government has con-able. The trade altuation is, gene- the unfortunate clash between the Mr. Lo Kai Wing. Mr. AN, Mac- in war areas where the conditions debts to Government departments tinued regularly to pay the for-rally speaking, good, and there is two great Powers with whom we fadyen, Llent. Col. ED. Matthews, lations. The result Was
eiga loan obligations secured on optimisin about the future of are so closely associated in East Mr. M. J. B. Montargis, Mr. A. accession of strength to those have not been paralleled since the proceeded satisfactorily.
mining...
ern Trade-there has already been Morris, Mr. A. Morse, Bir H.E. Chinese who, rightly or wrong-Taiping Rebellion of some 80 years The conclusion of agreements the Custoins, Salt and Railways. ly, Jaw no hope of co-opera-ago. Distress is also great. in the regarding the Chinese Govern-
an appalling loss of life and much | Pollock, K.C., Mr. §.H. Ross, Mr. F. tion with Japan and advocated a foreign communities. The Lordment loans in default and the
misery, to say nothing of the huge W. Stapleton, Mr. D.V. Steavenson,. policy of stern resistance to ag- Mayor's Mansion House Fund gave improved outlook in China to which
expenditures and the heavy loss Mr. J.A. Tarrant, Mr. G.G.N.. Tin-. gression. The subsequent meeting help at a most opportune moment, I have already referred, had alother countries in which we difficult periods in the seventy of trade. It is obvious that warsson, Mr. A.H. Vaswani, and Mr. of the 3rd Plenary Session of the but further help is needed and the favourable effect on Chinese bonds operate, you will expect me to say three years of its existence and or incidents will undoubtedly have Wong Ping Sun.
he spoke, in suspense as a result
of the Slan incident when General
Chiang Kai-shek was kidnapped.
That affair, it now appears, was
WAR AFFECTED AREAS.
from 1919. Furthermore, the good
STATUS OF SHANGHAI
DANGEROUS TENDENCIES
has Our Bank Before I pass on to deal with
faced
many
The result of the year's working