CO129-250 - Acting Governor Barker - 1891 [6-8] — Page 679

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The Daily Press.

HONGKONG, JUNE 19TH, 1991.

THE character of the business to which Mr. KESWICK's Share Bill is calculated to put a stop was illustrated by the evidence recently given in the case of RusTOMJEE'S bank. ruptcy. As that case is still pending it would be improper for us to comment on the conduct of the bankrupt, but speaking sim- ply of the class of business in which he was engaged we may be allowed to remark that if to put a stop to it would, as the Hon. T. H. WHITEHEAD fears in his letter published in yesterday's issue, deaden the market, all we can say is that the more the market is deadened the better. If the stock market can only be kept alive by the buying and sell- ing of non-existent shares the institution must be pronounced an unmitigated evil. It was pretty much alive up to 1889, and now we are suffering for it. If we had had a "deadened" market during that period of disastrous inflation, that is, an honest mar- ket, a market in which only actually exist- ing shares were bought and sold and from which the gambling element was absent, our present condition would have been very much better than it is. With such a severe object lesson before us, it seems singular! that the Colony should fail to profit by it. After the decision of the Chamber of Com merce yesterday afternoon, however, it may perhaps be considered expedient to postpone the Bill until public opinion is more nearly cultivated up to it. Although we agree with the minority, we feel that the decision of the majority must be treated with re- spect, albeit the majority was swollen by a number of brokers, who are interested parties. The decision might have been dif- ferent had the meeting been a public one, instead of a meeting of the members of the Chamber of Commerce only, but that of course is a mere matter of speculation.

It is very possible that difficulties might be encountered in the practical work. ing of the measure, shares passing as they do between this and Shanghai and the Coast Ports. A Hongkong man buying shares for forward delivery in Shanghai would probably not know their numbers, and it might be considered hard that he should be deprived of his chance of selling them forward on the Hong- kong market. We should not ourselves feel disposed to attach very much importance to the point, but we can better understand op- {

position to the Bill ou such grounds as this than on the general ground that it would "deaden" the market, which is the key- note to Mr. FRANCIS's opposition as well Mr. WHITEHEAD'S. Every stock has its intrinsic value, and if by quickening the market is meant unduly inflating stocks above their value the consequences to the Colony of such quickening cannot be otherwise than disastrous, favourable as they may be to in- dividuals. However, there is no restriction on time bargains at present, and the market. is dead enough in all conscience. Nor does Mr. KESWICK's Bill propose to put a stop to time bargains, but only to the sale of shares by people who do not possess them. Mr. WHITEHEAD in his letter states that other Bank Managers of longer experience in the Colony than himself say the Act would be a dead letter except when dishonest | speculation came to grief, that then its action would protect and favour the rogues, that it would not stop time bargains, that it would encourage dishonest speculators, aud possibly induce men who were not actually dishonest to begin with, but whose sense of honour is not of the highest class, to speculate wildly in time bargains knowing that if their speculations turn out well it will be a good thing, if badly they can repudiate their con- tracts successfully. But where would such people find others willing to sell to them ? If a man wants to enter into a transaction not recognised by the law he is careful whom he deals with. just as at cards he will not play with a company in whom he has not confidence. We cannot see, therefore, that this argument has any force.

Mr. WHITEHEAD recommends as an alter native measure the licensing of sworn and substantially guaranteed brokers with a strictly regulated stock exchange rigidly ex- cluding all jobbers." A good deal has been said at one time and another about licensed brokers, but the functions of the broker would remain the same whether he were licensed or not. A substantial revenue might be derived by requiring every broker to pay a licence fee, but beyond that we do not see that it would have any effect. might be an advantage also if brokers were guaranteed, but that would not check | the gambling element, nor has the ne- cessity of a guarantee been shown by any instances of brokers converting the scrip of their clients to their own use or indulging in other malpractices. Failing the passing of Mr. Keswicx's Bill the remedy suggested by our correspondent; "Investor" is worth consideration, namely

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