March 1st, 1929.]
measure of foreign expert supervi- sion is still maintained, have made
a
CHINA OVERLAND TRADE REPORT.
substantial improvement and have cleared off their arrears of loan service.
The Military Problem. Consideration of the railway situation brings me to the question of the armed forces, the existence of which at their present strength of over 13 million is the funda- mental hindrance to progress and lics at the base of the reconstruc- tion problem. economic burden to China of hav- ing to support these unproductive legions, the militaristic system which they represent must, while it lasts, block all important schemes for improving the state of the country. As I have hinted al- ready, independent military commander clinging to control of the sinews of war in his district an insuperable obstacle to national reorganisation real reform depends on the cen- tralization of military coupled
Apart from the
is
an
SO
that
ment of Sir Francis Aglen two years ago. He is succeeded by Mr. Maze, for the success of whose ad- ministration we tender our best
wishes.
In the case of the Salt Gabelle, the National Government have re- pudiated many of the major pro- visions of the 1913 Reorganisation Loan Agreement and substituted new regulations, drawn up with- out reference to the signatory banks, rigorously curtailing the joint supervisory powers of the Chinese and foreign Chief Inspec- tors. It is gravely damaging to the new Government's reputation for good faith that they should hold themselves free to alter con- tracts by their own arbitrary de- cision even when, as in this case, the rights involved had been made almost a dead letter by the action of the authorities of a previous regime. The Minister of Finance has, meanwhile, publicly pledged himself to provide for the services of the loans secured on the Salt Revenue, and the foreign Govern- ments concerned have noted his undertaking.
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that we realize the peculiar diffi- culties of their task and, in follow- ing the situation, we strive to maintain an outlook essentially broad-minded and free from petty or biassed views.
Finally I would ask for your confirmation of the action of the Directors in voting a bonus of 10 per cent. on their salaries to the staff. The year has been a very difficult one to all concerned and I feel confident you will approve of this recognition of their ser- vices. adoption of the Report and State- I now beg to propose the
After the pro-
ment of Accounts. posal has been seconded and before placing the motion before the meet- ing, I shall be pleased to answer to the best of my ability any ques- tions that shareholders may have to ask.
SECONDER'S SPEECH.
seconding control
with reduction of the armies. We may welcome the at- tempt made to grapple with this problem by the Disbandment Con- ference held at Nanking month.
Foreign Relations.
last
In Sino-foreign relations the year has been eventful, new treaties having been signed with all but one or two of the Treaty Powers. Our own Government concluded the
new tariff treaty on December 20th, followed on the next day by the presentation of letters of credence by H.M. Minister. Gen- eral, as well as diplomatic, re- lations between the two countries may happily be said to have re- turned to normal.
The anti-British agitation of two or three years ago has now prac- tically vanished and a new spirit of friendliness is making itself felt, for which I believe we are in no small part indebted to the per- sonal influence of H.M. Represen- tatives in Peking and Hong Kong.
The recognition of tariff auto- nomy follows logically from the British declaration of policy in Chinese affairs made at the end of 1926 and is a first and major step in the treaty revision which H.M. Government then accepted as being due in justice to China. It is much to be hoped that the conces- sion will be taken in this sense and not made a stepping-stone for demands for the prompt and un- conditional surrender of essential foreign safeguards, the removal of which is not yet warranted by existing conditions in China and can safely come about only by a mutual
of process
adjustment. Much as I hope so see the neces- sity for special foreign rights re- placed at an early date by the security afforded by a responsible Chinese administration effective throughout the country, I do not hesitate to say that in the state of affairs which exists at the pre- sent moment the total disappear ance of the existing safeguards would be disastrous to foreign business with China.
Customs and Salt Gabelle.
Of the so-called foreign-controll- ed services, I have to record, with regret, the resignation of Mr. Ed- wardes, Officiating Inspector Gen- eral of Customs, since the retire-
Foreign Debt Defaults.
The list of defaulted Chinese foreign loans in which British in- terests are involved was increased last year by the addition of the Anglo-French loan of 1908 and the Crisp Loan of 1912. Five of the railways loans are also in arrears and, the total defaulted payments for 1928 on the British portions alone (not including unsecured loans) amounted to £1,160,000. It is to be hoped that the Govern- ment will not delay in taking in hand a scheme for liquidating the large body of arrears on these foreign debts.
The Hon. Mr. J. Owen Hughes, said :--Mr. Chairman and Gentlemen: Before formally seconding the adoption of the re- port and accounts, I feel sure it will be the wish of everyone pre- sent that I should express our sympathy with the Chief Manager upon his unfortunate accident, and to express our admiration for the manner in which he has, notwith- standing, carried out literally single-handed his onerous duties (applause) and to wish a speedy mending of his right arm.
I am also equally certain that shareholders will join me in con- gratulating our Chairman on the lucid and exceedingly interesting exposition of the Bank's affairs during the past year, and particu- larly with the masterly review of the political and economic condi- tion of affairs in the East general- ly, and more especially in China,
It may not be out of place to mention in round figures the out- standing amount of long-term Not only do we here in Hong Chinese loans raised on the Lon-Kong look forward to this annual don market. The total is between 30. and 40
millions of pounds sterling, of which roughly one-half relates to loans used for railway construction.
If my review of the Chinese situation has been less tinged with optimism than some of my hearers might have hoped, let me remind you that I have been dealing with the facts of to-day rather than the promise of to-morrow and, fur- thermore, that a transitional period is always a difficult, and often a disappointing, time.
Spirit of Progress.
I count it a great achievement in itself that the Nationalist party and its military supporters have held the country together since their victory of last summer and one can see in many directions out- side the range of politics the pro- mise of rapid advance to take material examples, in the opening up of the country by extensive motor roads and by the aeronau- tical development of which we have had a striking example in the successful flight by Chinese pilots across the entire length of the country from Canton to Mukden. There can be no doubt that the spirit of progress is abroad throughout the country. May I conclude by saying that those who bear the responsibility of directing this progress and of restoring law, order and prosperity to the coun- try have our genuine sympathy,
meeting of the Hong Kong and Shanghai Banking Corporation to have presented to us the consider- ed views of the Court of Directors, the Chief Manager, and Branch Managers of the institution, so also do the banking and commer- cial world generally, and I think it will be conceded no better review of the situation has ever been pre- sented than that which we have just now listened to.
The Bank's Strength.
I will not attempt to analyse the formidable figures that are dis- closed in the statement of the affairs of the Bank, which clearly proves
and its strength
fully justifies its position in the front rank of the world's financial institutions to-day, of which fact, we, in Hong Kong, are naturally proud.
cause
ac-
Whilst we note with regret the result of the year's working is somewhat less favourable than the preceding years this however, can
no surprise to those quainted with conditions that have ruled in the principal fields of the Bank's operations during the past can well congratu- year, and we late ourselves on receiving the same dividend as allocated for the past few years, and I would here congratulate the Chief Manager, and all associated with him in the attainment of this very satisfac- tory state of affairs, bearing in mind the undoubtedly difficult and
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