1932-04-19 — Page 7

6

TUESDAY, APRIL 19, 1932.

Bank's Annual Report.

The Mercantile Bank of India

Chairman's Comprehensive Survey of East and Far East

Only An Optimist-Dare

Prophesy of 1932 ·

THE CHINA MAIL.

remit £19,000,000 to this side at its operations to the control of cur- rates rising to 1s. 6d. Since the rency and credit, but we cannot end of the year these shipments of think that a new Indian Exchange | gold have continued in large volume, Bank is required, and it would be the total since the movement start- a new and dangerous precedent for ed now amounting to about £41,000,- the Government of India to provide |000, and this has enabled the Indian the capital for such a Bank. As we Government to obtain further value the business of our Indian sterling to an amount not only suffi- customers very highly, it is perhaps cient for necessary requirements, unnecessary for me to say that it but to pay off, a large amount of would be folly on the part of Bri- maturing debt. It may be said; tish Banks to discriminate against therefore, that so far as finance is such good friends in the matter of concerned, the Government of India making advances and we certainly | is in a much stronger position than do so, but we are not prepared to at any time in the last year or two, lock up the money of the Bank in while incidentally these shipments Industrial Debentures, as it is sug- of gold have been helpful in main-gested we should do, for that is not taining the value of the £ in gold good business or good banking currencies, the shipments in ques-feither for British or Indian Banks. tion having gone chiefly to the The suggestion that we should ap: Continent, but also to America. As point Local Advisory Boards at etichļ I have said, conditions in India are of our Branches seems not only reflected in the trade figures for unnecessary but might be opposed the past year. Aa compared with to the interests of many of our 1930 the exports of merchandise-Indian customers. Then there show a decline in value of £62,000,-seems to be an impression that Bri- |000 at £127,000,000, and at £101.-tish Banks are prejudiced against Proceedings at the Thirty-ninth world-wide depression in 1930, and 000.000 the imports have fallen by sound Indian Insurance Companies. Annual General Meeting of the said that the outlook for the then £38,000,000. The imports of silver This is far from the case, as Shareholders of this Bank, held at current year depended upon a re-were only £5,000,000 againsture always ready to and do accept Winchester House, Old Broad overy in prices generally. Unfor- £9,000,000 in 1930, while instead of the policies of such companies. The Street, London, E.C., on Tuesday, tunately, not only has there been nearly £12,000,000 of gold imported proposals that, while British Banks the 22nd day of March, 1932. Sir no such recovery, but there has in that year there were not exportsure to be licensed, Indian Banks T. S. Cutto, Bart.. the Deputy-been a further fall in prices and or £25,000,000, last year. The re-should not require...

a licence and Chairman, presiding.

a grave world economic crisis. The sult is that, including merchandise that British Banks should not be The Chairman, in opening the suspension of the Gold Standard by and bullion, the visible balance of allowed to accept Indian deposits or proceedings, said: Ladies and gen- this country is the most momentous trade in favour of India last year have branches up-country

are, to tlemen. I am sorry to say the Chair- event in post-war financial history was £46,000,000 comparing with) say the least, unreasonable. man is ill. He has asked me to

1930, but this must now refer to the conditions: express to you his regret that, on the depreciation of the pound has favourable result was due to re- prevailing last year in countries the advice of his doctor, he is un- not brought about any material rise duced imports of silver and the un-other than India and where we have able to be present to-day to preside in internal prices in this country, usual exports of gold. If the figures branches, but as no country has es- over the meeting. 1 am glad, how- but this is at least partly due to the relating to merchandise alone are caped the effects of financial ever, to be able to assure you that people who, as the result of high compared the balance in favour of stringency and the loss of pur- he is progressing favourably. His reduced purchasing power of our India declined from £54,000,000 in chasing power resulting from the devoted attention to the affairs of taxation, are finding it necessary to 1930 to £28,000,000 last year. On low prices ruling for primary com- the Bank is well known to you all, exercise strict economy. Any ten-the export side of the account the modities, I have nothing encourag- and I am sure I am interpreting 'dency to an advance in sterling value of cotton declined from ing to say. your wishes in asking your permis-ices has been offset to some extent £41,000,000 to £24,000,000, raw jute

Ceylon.

It is true that, so far, at any rate, £31,000,000 in

Malaya.

we

I

with taels 180,000,000 in 1930, though this increase Is largely due to increased duties and the continued collection' of these on a gold basis. Then the action of Japan in Man--- churfa, resulting in an anti- Japanese boycott, which spread to Siam and British Malaya and proved of assist. ance to Lancashire manufac- turers, inflicted losses on the Importers of thè ́ ́large stocks of Japanese goods. The wide fluctuations in silver also pre- sented difficulties for those en- gaged in the import trade in China and at Hong Kong.. The low price of the metal rul- ing during the greater part of the year ought to have given an impetus to exports, but the economic basis in Europe and America, combined with the disturbed state of the country and difficulties of transport, checked this. In February the quotation for silver touched a new low record of 12d., the highest price of the year being ́#19/16d., which was quoted in November, but of course this wide range is explained by the depreciation of sterling. The Hong Kong dollar and the Shanghai taef fluctuated ac- cordingly, the former ranging from 10 15/16d. to 18. 65/15d. and the latter from 1s. 1%d. to 2s. 0 5/16d. The sales of silver by the Government of India, who raised the duty on imports twice during the year, are estimated at 35,000,000 ounces, and it is reported that the Siamese Government dis- posed of about 18,000,000 ounces. The Commission ap. pointed by the British Govern- ment to enquire into and ad- vise upon the question of Hong Kong currency issued their report in August and do not recommend stabilisation of the exchange in the meantime, but make certain proposals for placing the currency more directly on a silver bullion basis than it is at present. An, interesting feature of the proposals is that, the dollar should practically cease to be legal tender and that the notes of the three Banks of Issue- of which we are one-should be given legal tender status,

Mauritius.

D.E.L.

а

sion to send to him an expression of by a fall in gold prices. This in from £11,500,000 to £9,000,000, jute The shipments of tea from Ceylon your regret at his absence and the turn has

reduced the purchasing goods from £28,000,000 to £16,000,show an increase In quantity, but best wishes of as all for his speedy | power of countries still on a gold 000, tea from £17,500,000 to £15,- at £15,750,000, a decline of nearly recovery. (Hear,, hear).

or gold exchange standard, such as`000,000 and ground nuts from £3,000,000 in value compared with I know you have come to hear the the Dutch East Indies and Slam. £8,750,000 to £7,500,000, these dif-the previous year, while the ship Chairman deliver one of his inter- The causes and effects of the crisis ferences being accounted for chiefly ments of rubber declined from esting addresses. I am afraid you have been ably and lucidly set out by the general fall in prices. Of 75,000 tons to 62,000 tons and in will find me an inadequate sub-by the Chairmen of the "Big Five", the imports, I will only mention the value from nearly £4,000,000 to stitute, but it will be my privilege and ether Banks and there is not figures relating to cotton piece £1,750,000, to read his speech to you and my much left for me to say. The fall goods and yarn shipped from the duty afterwards to answer any in prices resulting in loss of pur-United Kingdom, the value of which The depression in British Malaya, questions that may be put to me. chasing power and confidence is, of fell from £14,750,000 in 1930 to where the price of rubber and tim

course, Good Ship "Mercantile Bank."

at the bottom of our £6,250,000 last year. Economic is of such importance, has been even Before reading the Chairman's troubles, and it is difficult to select conditions were the main cause of more acute than clsewhere, and address muy I, just for a moment, the chief cause of this. I do not this, but the boycott of British heavy losses have been made. The touch on one point. I would like to think it is due to monetary causes goods partly contributed, as imports average price of rubber last year emphasise the difficulties of the or that monetary policy can control from Japan did not fall to nearly was only about 3d. per lb. against The cyclone in Mauritiua in the! year we are reviewing. I am sure the world price level, and certainly the same extent. But it is the 51⁄2d in 1930, and the cofrespon-early part of the year resulted in You realise the Board and the Offi- not in the absence of wide inter-Bombay cotton mills that feel the ing prices of tin £118 and £142. a small crop of sugar and, with cials of the Bank have had an national co-operation. There are competition of Japanese goods most The net shipments of rubber, which large world stocks of this com- anxious and trying time. We all those who advocate a return to bi-lín apite of the fact that they are exclude imports from the Dutch modity and no recovery in the owe a tribute to the cautious policy metalism for the purpose of enlarg-protected to the extent of 25 per East Indies, were $22,000 tons cam- price, conditions in the Island have of your Directors in better years ing the basis of credit, raising cent. It is, of course, natural' that pared with 442,000 tons in the pre-deteriorated further. A loan had which made the financial timbers of prices and, as they say, increasing the Cotton Industry, the most im-vious year, the respective values be-to be issued recently for the pur- the good ship "Mercantile Bank" so the purchasing power of Chins and portant in the country and which ing say, £12,000,000 and £25,000,- pose of giving financial assistance to strong that she was able to ride the other countries. But here again a counts for so much on the Bombay 1000. The shipments of tin the planters. tempost of last year in a manner wide international agreement would side of India, should feel the effects amounted to 88,600 tons, valņeď

at least be necessary, worthy of her traditions and her

and at the of the economic depression and the approximately at slightly under The Dutch East Indies also are prosent time particularly it would disturbances created by the Con- £10,000,000, which place in Eastern banking.

compares with seriously affected by the low price be difficult, if not impossible, to gress Párty. The Calcutta jute 96,800 tons £13,750,000 in the of and poor demand for sugar, fix a ratio between gold and silver, mills had not to face such a heavy previous year. The total value of large part of the 1931 crop stili re- while surely the purchasing power fall in the price of jute as in the all merchandise imported is enter-maining unsold, and at present it of a country depends upon the previous year but, 35 the ed at £52,750,000, the comparative does not look as if the Chadbourne volume and prices of its exporta result of a poor demand for figures for 1930 being. £82,000,000,{plan to restrict the world crops of visible and invisible.

their manufactured goods, stocks while the corresponding, figures re-sugar is meeting with any particu- accumulated and shorter houra of lating to exports are ́£46,750,000|lar measure of succEAA. Also Java In spite of a satisfactory mon-working had to be adopted. Then and £76,000,000. These figures, and Sumatra are suffering from the soon, India has had to bear her with a further decline from need hardly say, speak for them-low prices of rubber and tea and, the world-wide economic the already low price of tea the selves; showing as they do the ex-as the guilder is attached to gold, depression as she depends largely Companies engaged in this industry tent to which British Malaya is feel- this means that to meet competi- upon the prices obtainable for her had a very lean year. The rupes ing the economic crisis,

tion with British Malaya and India agricultural products; unfortunate-fluctuated between 15. 54d. and is.

Burns, and Slapı,

they have to accept very low-prices ly also the depression was ac6d., which was the high point I mentioned last year the extent in local currency. centuated by the civil disobedience touched in December, the average which Burma and Slam depend on

The Accounts. campaign, the boycott of British for the year being is. 6.27/32d. the market for rice and as, until I come now to the accounts, and, goods and the closing of markets, A Report Not Wholly Fair to the gold standard was suspended, while of course these..compare un- resulting in disturbances and dis-

British Banks,

prices continued to fall, both suf- favourably with those of past years, couragement of trade. Of all this

The report of the Central Bank-fered from this cause, In spite of I hope that. In view of the up-j there is more than sufficient evid-ing Enquiry Committee, to which larger shipments than in the pre-exampled difficulties and anxieties ence in the figures relating to im-referred at our last meeting, was vious year. The shipment from of last year, you are not unduly, dis- ports and exports and in the Rail-published in September and em-Burma amounted to 3,500,000 tons appointed with the results. (Hear, ways deficit, all of which have bodies much useful and interesting and those from Siam to 1,200,000 bear.) It was more particularly in necessitated the Emergency Finance information. The Chairman and tons. The Rupee being linked to the second half of the year that our Bill. The Government found it the other members of the Committee Sterling, Burma has lately had an troubles arose as the result of the necessary to cut down expenditure, are to be congratulated upon the additional advantage over Siam as suspension of the Gold Standard by usual, permit me to take the Direc-increase the Import duties and raise painstaking manner in which they the currency of the latter country this country and the heavy fall in tors Report and the Accounts as taxation generally, while in addi-have carried out the enquiry, which is still based on gold, with the result the value of British and, Indian read..

tion to selling Reverse Council Billa involved much time and labour. To that in order to compete with Government Securities, The re- to the extent of £17,000,000 to sup refer to the report in detail to-day Burma and market her crop, shefaults of the first six months, how- port exchange, large issues of is not only innecessary but it would has been obliged to accept a lower ever, were such that we deemed it

In these uncertain times he would indeed be a rash man to prophesy the future. I do not intend to attempt it, but there is a silver lining to all clouds, even if we can see it only dimly, and so we shall go forward with courage and con- fidence, seared a little, perhaps, by the ordeal of last year, but richer by the experience.

Before. I read the Chairman's speech I will ask the Chief Man- to read the ager, Mr. J. Steuart. notice convening the meeting and the Auditors' Certificate.

The Chief Manager read the no- tice and the Auditors' Certificate.

'CHAIRMAN'S ADDRESS.

The Chairman: Well, ladies and gentlemen, the Chairman's address to you is as follows:-

Gentlemen, I expect you will, as

I would at once wish to say how much we regret the loss we have

share of

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suffered by the resignation of Mr. Treasury Bills at high rates of in- take up too much of your time. But price in ticals, while the enltivator prudent to reduce the interim dive THREE STAR LARTELL, Robinson from the Board. He not terest had to be issued with the re-as some of the suggestions and re-in Burma has been able to obtain dend from 8 per cent. to 7 per cent,, only took a deep interest in the wel-sult that the average Bank rate has commendations closely concern a higher price in rupees. But in hoping then to pay a similar finsi fare of the Bank, but gave us valu- | been over 7 per cent., and there what are called Foreign Banks, spite of this handicap there was a dividend, and it is with regret able advice and assistance. We are was a serious depreciation in Gov-under which heading British Banks small balance” of trade in mer, that, in view of the unfortunate sorry to lose his services, but unfor erament Securities. The amount of are included, I cannot avoid making chandise in favour of Siam last events of the latter half, we do not turiately his health was such that Treasury Bills outstanding at the some reference to the reports. In year as compared with a smaller ad now see our way to recommend # he felt it was only fair to the Bank beginning of the year was equival- the first place I would say that so verse balance in 1980,

Of China It is always diff- Cult to know wha in a land of m prises, but

he should reálgn. I am sure youent to about $40,000,000 which was far as the majority report goes, China-Land of Mystery and will all join me in wishing him a increased to £68,000,000 in Septem- there is little or nothing to which | quick restoration to health. (Uber and reduced to £45,000,000 st we can take exception, but although would like on behalf of all the the end of the year. But in the this report was signed by all the Directors, to join in what the last quarter of the year, and as the Committee except rene, who has Chairman says in this epeting result of our forced break with issued a majority report there la paragraph in regard to Mr. Robin gold, and the Rupee: following infortunately a minute of dissentred from

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