24 BRITONS V. GERMANS IN CHINA
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showing how business should not be done. One firm with a large staff and a corres- pondingly large and world-wide trade made profits which, without deducting managing partner's share, and without deducting in- terest on capital, amounted to about 1 per cent. per annum on their turnover, but nearly one half of this profit was derived from the agency
agency they held of a certain British Insurance Company. This firm was well managed and many of their specialities gave splendid profits, yet they had apparently thought it necessary to join in the absurd scramble for
more, and yet more, trade, thus turning what might have been a most profitable concern into one getting nearer year by year to actual insolvency.
Another firm made a handsome profit a few years ago out of a Chinese Govern- ment contract. Since that time it had
A.
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apparently spent all the profit in en- deavouring, by showing great style, and with the help of extravagant measures, to repeat its former profitable transaction. The result was that when the liquidations were begun it was found that the firm was already insolvent.
Still another firm, one of the largest and most influential amongst the German enterprises, was found to be locally quite insolvent at an early stage in the process of liquidation. This firm, too, had many valu- able agencies which paid handsomely, but partly owing to lack of system and methods of costing, and partly to their falling victims to the prevailing desire for a big show and big turnover regardless of results, the exceedingly handsome profits made out of their various agencies were swamped by losses on other speculations, with the above disastrous consequences.