1930-03-04 — Page 7

TUESDAY, MARCH 4, 1930.

STEAMBOAT CO.

shareholders to contemptuously throw it aside as of little moment and unworthy of consideration and acceptance.

Continued from Paye 1.)

Rival Tenderers' Security Two Campe

Through Sir Robert's action, As a result of an honest and for which he was thanked by the conscientious divergence of views,Board, the present farmer's last the nine Directors have ranged tender was Increased by $10,000, themselves into two camps, made It was he who secured a tender up of three in one camp and six from another prospective farmer in the other, euch tenaciously hold whose initial offer for the busi- ing its own ground and apparent-neas was slightly better than the ly irreconcilable in their respec-present farmer's tender for the tive attitude. Both feel they are first year, and $12,000 better for right; both eager to safeguard the the second and third years. Com- best interests of the Company pare the respective values of the To both, therefore, shareholders recurity offered by the two rival | are indebted for their earnestness tenderers. In the case of the pre- of purpose.

rent farmer it is only $200,000.

new

THE CHINA MAILL

and to the recent tenders sent in to call for outside tenders, Two to the Company in respect thereof, tenders were received, one from Mr. and for the purpose of passing euch Hung Taze-yes, and the other resolutions in relation thereto as from Mr. Woo. Mr. Woo's tender may be thought fit."

was strictly not a tender at all be- the cause, whilst he offered to continue to the farming contract on certain at terms, he stipulated that it should

Notice has been given to Company that it is intended move the following resolution this meeting:-

T

NEW ADVERTISEMENTS.

FOR SALE...

be suspended if the s.s. Venezia Eaton Special Saloon, Late

FOR

SALE- Armstrong - Siddeley 1028 Resolution:

should be put on the run, and fur- Model, 20 h.p., 6-cylinder. In Excel- (a) That the polley of the re-ther that the hire money was to be lent condition. Apply Box No. 640, newal of the farming-out of the "adjusted" every year. The amount c/o “China Mail" Chinese freight and passage bust-of security. Mr. Woo put up for the ness of the Company's steamers performance of the contract was to to the same farmer, in view of the be the same as before, La., $200,000 fact that the farmer is himself for "both the Canton and Macao

a competitor of the Corpany's lines. business is prejudicial to the in-

I

against our views, wa here- by give notice that

we shall forthwith take the necessary steps to convene auch an extraordinary general meeting ourselves, and we therefore ask that, before majority decision of this Board, against our views, be carried into effect, a reasonable opportunity

a

be given to call this extraordinary general meeting."

Directors Hesign

on

Од

4. About 11 years ago the prae- increase and I also agreed personally December 11, 1929, Messrs. Lo and tice was started of farming out the to guarantee Mr. Hung to the Lo, on my behalf, replied to Messrs. Chinese freight and passage busi-extent of $500,000, so that, with the Deacons noting the date of the re- news to an outsider, the Company security (either in shares or title quisition meeting, and giving them retaining control of its ships and deeda) which Mr. Hung agreed to notice of the resolution which it running them. Mr. Woo Hay-tong put up amounting to $500,000, the was intended to be moved at such became the first farmer.

total amount of security would be meeting..

12. I frankly admit that I took a terest of the Company; and lot of trouble in persuading various

(b) That accordingly the direc-gentlemen to send in tenders. tors be and are hereby notifed succeeded with one but only after Let me digress for a moment In the case of his competitor it

that it is the wishes of the share-great difficulty, as all predicted that and examine the composition of is five times na large. viz.,

holders of this Company that the their tender, however attractive, the membership of the opposing $1,000,000! And yet, for no con- directors should abandon the said would not be accepted. camps. In one, let us call the vincing reason, the majority direc-

policy and should adopt a new that it was

They felt "minority directors" are the three tors deckled to ignore the

n foregone conclusion policy of either giving preference that Mr. Woo would be awarded the Chinese directors: in the other tender with all its greater advan-

ns far 28 possible, to A

new contract. fand, it will be styled the "majortages to shareholders and to afford

The gentleman non-competitive tenderer for the whom I succeeded in persuading to liberated at two subsequent meet- 17. This subject was again de- ity directors") are the six Euro-the present farmer a fresh oppor- farming contract, or run its

tender is Mr. Hung, to whom I evenings of the Board, viz., on November puan membera. Both groups are tunity to increase his offer so as

steamers on its own account. offered financial assistance, as I re- 20 and 28, respectively. made up of men of substance in to enable the directors to award

2. In view of the great import-

The other this Colony, men who enjoy a the new contract to him. Pertin-ance of the meeting which will be gard an outside tender to be so im- directors refused to accept this aug- commercial reputation and forjently, Sir Robert Ha Tung re-convened in pursuance of our re-tender was Increased by $24,000 asistence-which was

portant.

Subsequently Mr. Hung's gestion, and perfsted in their In- whose opinions respect is claim-marks, "the principle anderlyingquisition, I feel it only right that year $12,000 in respect of the majority of

carried by a ed. Sir Robert Ho Tung is the the advantage of sealed tenders I should explain shortly the facts Canton and the same amount for the with Mr. Woo with a view to award- votes to negotiate leader of the “minority" group. | is defeated."

which have resulted in the action Macao line. He has given 14 years of servica I can only attribute to a con- which we have taken.

ing the tender to him, and in con- to the company as director. This siderate moderation the absence

The Farming System

Tenders Compared

sequence Mr. Li Tse-fong, Mr. M. K. length of service places him in of an outburst of indignation 3. The farming system, which 13. When these two tenders were Lo and I have resigned from our the unique position of an intim-against a deliberate policy of will be referred to later, was start- before the Board it was adjourned positions as directors. ate personal knowledge of, and ac-playing fast and loose with the cd some 11 years ago. Prior to to the next day for an analysis of 18. Messrs. Deacons, on behalf of quaintance with, the working of minority directors In the vacllin- this time the Company ran its steam-the figures to be made and it was the Company, informed u the company in all its branches tion that has made itself felt as such ers on its own, employing an again adjourned. When the Board December 9, 1929, that the requisi and of its present and future re- a pronounced feature of the con- office compradore and the usual met It was announced that Mr.tion meeting would be held on quirements. Mr. Li Tse-long is duct of negotiations by the major- Chinese staff on board.

Hung would even make a further December 23, 1929, at 8 p.m. a large shareholder and has ex-ity directors, and which must be tensive business connections with decidedly annoying, to put it mild- the Chinese. Mr. M. K. Lo is aly, to the minority group. There leading member of the Chinese was patient endurance when the community of Hong Kong whose minority agreed to consent to a complete confidence he enjoys. postponement of this meeting from

December 8 Majority Group

last til to-day. In

5. Ever since, with each renew- $1,000,000, Even on the figures 19. Since then it was suggested The majority group is led by order that negotiations for a com-

The ing contract, Mr. Woo has been of Mr. Hung's original tender they that an effort should be made the Chairman of directors, who, promise might take place.

At first there were slightly better than Mr. Woo's reach a compromise in order to until the return of Mr. C. Gordon counsel of moderation on the part awarded the farm. Mackie, was Mr. M. T. Johnson. of the minority directora was re were several outside tenders, but for the first year and $12,000 better avoid the necessity of an extra- ordinary meeting. Holding the His associates are Messrs. J. P. warded in the end with the in-gradually, with each new term, and for the second and third years.

6. that It was known that the Company 14. It should be emphasized and strong opinion I did, and do, it was Warren, R. E. Coxon, J. M. Alves, timation.. on February

that strictly there was of course Impossible for mo to be J. H. Little and R. K. Batchelor. "any change in the present sys-would prefer Mr. Woo, fewer and repeated It will therefore be seen that the tem of farming of the Steamboat fewer tendera were received. Last only one tender before the Board, a party to any arrangement which contending parties pilted against Company's steamers may lead tender, and the same as regards did not send in any tender in ac-But I was given to understand that year there was only one outside namely, Mr. Hung's as Mr Woo, would be at variance with my views. each other can have no other eventual breaking up of the exist motive to serve than that of the ing Pool Agreement between the

cordance with the printed require the Company would consider the well-being of the company of Steamboat Company and the China made good profits out of the farm-of a letter containing proposals on its own as

Woo appeared to have! ments. His tender took the form question of running the steamerg whose destiny in Sir Robert's own Navigation Company."

an experiment for à word, they are placed in the post are told that there are Agreeing with which, naturally-and no which were contingent. However, certain period, under certain con-

fair-minded business man

can the majority of the directors once

I was thereupon urged to on both blame him he gradually built up more decided to ignore Mr. Hung's consent to a postponement of the

ship-owner. Out of the profits he Woo with a view to getting an Intions might take place. and consolidated his position as a tender, and to negotiate with Mr. meeting in order that such negotia. thus made he founded the Tung crease from him and to award the

Elminate Freight War On Steamship Company, and built contract to him. the 8.8. Tung On and Sal. On, reen that the principle underlying necessary to into detail over It will thus be 20. It is neither desirable nor which of course constitute a direct the advantage of sealed tenders is these negotiations. would merely opposition and competition to the defeated and provides yet another therefore say that there were ex- Company's steamers.

7. Year after year I pointed out couragement of outside tenders.

proof in substantiation of the dis- changes of memoranda between my of William Ernest Henley's lines: to the Board the ultimate implica-

celf and the. Company, and there 15. I should like here to pause and were interviews, with the result "It matters not how strait tion of their policy, namely, that to point out that if I had not suce that both parties agreed to the the gate.

the Company would Increasingly ceeded in inducing Mr. Hung to principle that the Company should How charged with punishments have to depend on Mr. Woo. the scroll,

8. Sometimes when the question alternative but to accept Mr. Woo's age side of its business on its own

tender the Company would have no

Chinese freight and pass- I am the master of my fate, of having a new tender arose the

terms, unattractive as they were,

tion of "masters."

ers.

The point I would like to em-

But we

ments legally binding. Messrs. Butterfield & Swire and

phasise is that the "split" arose the Company until December 31, in connection with the polley of 1936." the renewal of the farming out of

"Captain of My Soul" the Chinese freight and passage Sir Robert has dramatically business of the company's steam- pleaded with us that "the com- I ask you to keep well in any might be captain of its own mind that it is the Chinese aide ships and master of is own des- of the company's business with tiny." What a fitting paraphrase which we are concerned at the moment. Can the European sec- tion of the Board hope to appre- clate Chinese psychology and in- terpret Chinese mentality with the same degree of understanding that their Chinese colleagues on

this year..

6. Mr.

ditions,

run the

1

PIANOS

FOR SALE OR HIRE

TO POSSESS

'A PIANO IS

EVIDENCE

OF CULTURE

TO LOVE MUSIC

IS A

COMMENDABLE

THING

PIANOS TUNED AND REPAIRED.

Anderson Music Co., Ed.

EXSHAW

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Is the best-recommended by

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CALDBECK, MACGREGOR & CO., LTD. (Incorporated under the Companies'' Ordinances of Hong Kong,) Prince's Building, Ice House Street

to

JUST ARRIVED

I am the captain of my soul."directors would decids giving Mr. and in years, to come, and unless the account for one year, under an ar- - the Board do? I am afraid not. I plead with you, Gentlemen, in Woo the continuance of the farm policy of the Company were altered, The lack of direct personal con- the words of James Benjamining contract on the ground that, it is impossible to see how anyone

"Be the proud captain still of thine own fate."

he should be given the preference.

Mr. Woo Hay-tong which has for its rangement or ́ understanding with object the elimination of any pos- sibility of a freight war between the two parties. The Company was to run the business through the Chi

This

tact, a complete absence of the Kenyon, to

having proved himself satisfactory would venture to, tender. knowledge of the language and

to the Company in the past years, imperfect acquaintance with Chin-

Preference For Outsider ese business methods must neces- Are we going to be so deaf to Other considerations in favour of a 16. At the first meeting of the sarily place the European mem-Sir Robert's appeal, ao indifferent competitive tenderer and, Incident-Board regarding the tenders, name-nese directors, who were to be 'bers in a position of disadvan-to our own interests, ao aubeer-ally, more beneficial to the sharely, on November 15, 1929, Mr. M. K. invited to rejoin the Board. tage as compared with their Chin-vient to the dictates of others, as holders do not appear to outweigh Lo made the following statement sub-committee was, of course, to be ese confreres. The opinion of to ignore the logical advocacy of the predilection for Mr. Wou. Some to the Board the latter is, therefore, entitled to our cause and fail to support the times this preference would be greater consideration and must authors of the Resolution before based on the ground that it carry greater weight and influence us by denying them our loyal sup to the Company to contemplate any would be dangerous and threatening i In all matters appertaining to port and withholding from them "split" and a freight war with him. Chinese business.

our vote that will help them to In vain I attempted to point out Fear Not Imaginary

emerge triumphant from a contest that if Mr. Woo were in such a to which they have devoted so The Chiness advice to that, if the present Chinese farm with such unflagging zeal in order so impregnable that the Company's much anxious time and laboured strong position with the lapse of years, until ultimately it would be er were continued in his present that the company might aseert Its Independent existence would be strong position, it

would be so independence and shake off the placed at the mercy of its own far- Impregnable with the lapse of tyranny of a relentless force? I years that the company's indepen: cannot for one moment imagine mer.

would be placed that we

Exploding A Fallacy

>

dent existence

--

us is

can do otherwise than

at the mercy of their own farm vote wholeheartedly for the

er. This fear is

-DI

9. Last year, in order to explode

namely, that no outsider would

not imaginary. solution moved by Sir Robert He what I considered to be a fallacy,

It is very real Indeed. It has Tung and seconded by Mr. Li Tee- venture to tonder with Mr. Woo transpired in one of the later fong. They rely on us for it. Let in the field, I personally offered stages of the recent negotiations us give it to them without stint to take the farming contract my for a compromise between the con- and so prove that diligence, zeal self by paying 5 per cent more flicing views of the Directors that and watchfulness in our "although the Board was willing must have their reward.

case than the tender (whatever the to run Ita, steamers on its own

amount might be) recalved from Mr. M. K. Le supported the re-Mr. Woo; but as I made this offer account, under conditions which

solution. amply protect the company from

The two resolutions were

as a test of my theory and in the then absolute conviction that I was right being in a worse position than if

put to the meeting and were carried and the directors wrong a test the existing farming agreement by 24 votes to 22,5 m had beon adhered to, the Com-

that could not but prove beneficial After the ballot, the Chairman to the Company-I left it to the *pany now proposes to continue the said that in accordance with article directora whether to accept it or system of farming out to Mr. 74 of the Articles of Association of not. In proof of the correctness of Woo"

Some time ago

the Company he would demand a poll my attitude it is interesting to em- Sir Robert Ho for which he fixed June 26, in order phasize the fact that the 5 per cent Tung sounded a note of warning to give absent directors, and share increase offered by melled to Mr. holders an opportunity of voting. Woo's tender being increased by [Owing to extreme pressure on $12,000 with a contingent clause our space several speeches have that the Company-would-partier been omitted, but will be pub-pate in half his profite when they ished to-morrow:]

exceeded 10 per cent. For this 1 was thanked by the Board,

of what might happen: he was Ignored. Impending danger now threatens the company in a very real senso Sir Robert Is very anxious to ward it off. His is not a pegligible Interest in the company it la a very substantial -one. v 1. Böžare those of his asso clates Sir Robert, Mr. Li Tad

tween them more than one third the total capital of the company.

HISTORY OF DISPUTE

Sir Robert Ho Tung'a Answer

Several shareholders, including

They man of business, of ma- myself, have sent fa, a requisition, turni Jüdiment and cool delibera dated December 2, 1929, to the

kely to trife with directors, requiring them forth

10. Whilst on-leave-In North

"subject to the control of the Board, "Sir Robert Ho Tung, Mr. Libut would have the same authority Tse-fong and have very anxious- in relation to the management of ly considered the whole question the Chinese staff; etc., as that which of the tender, which is now be would be exercised by a farmer fore the Board, in relation to the under a farming contract. future of the Company. Our 21. In order, however, to show the deliberate view is that in the in-sincerity of my own convictions I would terests of the future of the Com-like to state more fully one of the terms pany it would be better to award Inaisted upon by the Egard, to which

I agreed. the tender to an outsider rather

Board's Conditions than to the present farmer unless Ono of the Board's his tender shall be the bighest. was: From previous discussions it would appear that this view is aot shared by some of our colleagues. "We realise that as directors we are more or leda in the posi- tion of trustees for the share-

feel this matter to be of such holders of the Company, and ave

fundamental importance, that, if there shall be any difference

'conditions

(Continued on Page 8)

KASHMIR

amongst us as to whom the tender SILK STORE

shall be awarded, this question- should be referred to the views

of the shareholders at an extra- ordinary general meeting to bo convened. We therefore request animous decision of this Board, that in, the absence of a un-

and Irrespective of whether a majority decision should be against us for not, an extra- forthwith convened In any case ordinary" generat meeting shall be

should this Board as a whole:de- elde this question, and should the majority decision be

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I wrote confidentially to my collea |gues suggesting:

MAN

(a) that the Company should run the Chinese freight and pas ange ́side of its business an ite own adcount or, altdemtively, !|

(b) outside tenders should be encouraged.

in with to proceed to dadvend an Ex

ordinar General Meeting of Neither of these suggestions was

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