-1-
Extract from the South China Morning Post of 24th. February, 1930.
46
HONGKONG BANK MEETING.
CHAIRMAN SAYS THAT SILVER IS NOT
TO RECOVER AT PRESENT.
TRADE DULLNESS MAY
Important pronouncements were made by the Chairman of the Board of Directors of the Hong- kong and Shanghai Banking Corporation (Mr. W. H. Bell) at the annual meeting of the Bank which was held in the City Hall on Saturday morning.
J
together with the drop in exchange checked the demand for imports, while exports fell away under the burden of military taxation and difficulties of transport." He feared that the marked falling off in British exports to the East, dating from last October, may yet continue.
LIKELY
CONTINUE.
an effective agreement among the leaders for the mutual reduction of troops."
Mr. Bell also dealt at length with the problem of "extrality" saying that until and unless improvement (in judicial matters) takes place it would certainly be premature, and not improbably Dealing with the price of silver Regarding the political situation disastrous in the fullest sense of he reviewed the world-wide falling in China, he gave a comprehen- the word, to place foreign business off in demand and stated that sive review, pointing out that under the sovereign control of "with conditions as they are in the Nanking Government had
local Chinese officials. China, one looks in vain for any survived three crises but probable source of sufficient now
disbandment still remains He also announced the resigna- strength and endurance to effect the most important issue tion of the Hon. Mr. A. C. Hynes an appreciable recovery in prices." in China's domestic affairs. "There from the position of Chief On the question of trade in is nothing which would do more Manager, and the appointment of China, he pointed out how "wars to restore the world confidence Mr. V. M. Grayburn to be Acting and disorders in the provinces which China so greatly needs than Chief Manager.
DISASTROUS
EFFECT OF OF
Addressing the shareholders, the Chairman (Mr. W.
H. Bell) said: Ladies and Gentlemen, The report and statement of accounts having been in your hands for some time I shall, with
your permission, take them as read.
The net profits for the year amount to $14,148,209.57 as compared with $13,430,061.61 for 1928-a return to approximately our earlier level of pro- fits as calculated in silver. This would be satisfactory were it not for the heavy fall in the rate of conver- sion from silver to gold-correspond- ing to a fall in exchange of just under 25% between the opening & closing of the year-which substantially di- minishes the sum available for our dividend in sterling.
In addition, the Bank has suffered heavy losses from frauds perpetrated in more than one country for which, however, I am glad to tell you full provision has been made. It is for these reasons that notwithstanding the good record made by the Bank in a year of serious trade depression- your Directors have thought it prudent to make the reduction of bonus, the possibility of which was adumbrated in the Chairman's speech last year. A conservative policy of management is particularly necessary in the case of a Bank and I trust that you will concur in the Board's decision and approve their recommendation in re- gard to the allocation of profits.
As shewn in the Profit and Loss Account, the
amount available after deducting the interim Directors' remuneration is $12,514,- dividend and 400.84 and the allocation proposed is as follows:-.
:
CHINA'S CIVIL WARS.
A final dividend of £3 per share with bonus of £1 per share (subject to Income Tax deduction) $7,876,923.08. Transfer to Bank Premises Account $750,000.00.
Transfer to Silver Reserve Account $500,000.00.
became in the end completely divorced from their nominal silver value and rose to a high premium over the silver currency which they actually repre- sent.
The resulting disturbance to trade between the Colony and China decided the Banks to revert to the circulation of the silver dollar. Many of the Balance carried forward to the Banks then sent orders for the mint- new Account
$3,387,477.76. Totaling of British dollars in London or $12,514,400.84.
Bombay, and 20 millions of these and Following the example of three Mexican dollars have been obtained, years ago we have made a transfer of which the greater part are already from Silver to Sterling reserve, your in the Colony. As the largest issuer Directors considering it advisable to build
of notes, and as the Clearing Bank, dollars force their way into our trea- of the we have seen the majority of these suries, a state of affairs which reveals itself in our increased note issue.
up the latter in view uncertainty in regard to silver prices, The amount, as shown in the Report, is $5 millions converted at 2/-.
Slack Eastern Trade. As regards the figures I will only remark that the Balance Sheet slackness of Far evidenced in the increases under the Eastern Trade is headings of Current Accounts and Fixed Deposits, while crease, attributable wholly to Shang-,
the cash in- hai, also reflects the disturbed trade conditions which have had the effect of restricting circulation of silver.
Our investments stand at well under market quotations.
It is obvious that a small colony silver dollars, and further imports of like our own cannot absorb unlimited
increase these are much to be deprecated. The would add, has only been rendered in our note circulation, I
having made a concession in regard possible by the Hongkong Government to the taxation of our issue, without which
an increase would have been prohibitively expensive.
The increase of $16.1/2 millions in our Head Office note issue is related to Hongkong's currency difficulties of months the Hongkong exchange fail-is the past year. During the first nine ed to respond to the drop in the price and the notes of the three Banks in of silver and in Shanghai exchange, Hongkong (on the basis of which all following business had for long been conducted among the Banks of many years ago) a mutual arrangement
The only expansion which I have to record in our field of operation is the opening of a new Sub-Agency at Muar in the Malay State of Johore. The Colony's Affairs. Of the affairs of this Colony there
little to addition
say except that, in
the inevitable reaction already mentioned, we have suffered to the currency difficulties
renewal Kwang provinces and other parts of of civil war in the two
very similar China. The conditions for trade being to those applying to China, I will refrain from treating them separately.
from the