CO129-429 - Public Offices & Others - 1915 — Page 50

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carried on far in excess of the legitimate needs of the business. The result is that the amount standing to the debit or credit of Exchange Account was in almost every case a larga one. The exchange department, manipulated by the Senior, was in almost every German House regarded as a legitimate business department, and in the case of Megara, Carlowits Co. the Manager was allowed a commi- ssion of 5% on the profita. The various departments were always oredited with the rate of the day, but the totals were manipulated by the Manager at his discretion. The Shanghai branch of one of the oldest German Firms in China this last spring was

oversold to the extent of £ 43,000 at an av: rate of 2/11 overbought

-do-

£ 37,000

-do-

2/64

4/7/16

and

The rates on the day in question being

2/61/8 respectively,!

Messrs. Carlowitz & Co. in 1913 showed the following Exchange balances on their Profit and Loss Accounts

Profit

Hongkong $ 14,740.

Canton

#t 10,425.

Hankow 418 38,466. Logg

Departmental profits. The percentages of nett profit

on which the various derartments worked after all depart- mental and standing charges were deducted were not appre- ciably higher or lower than in the case of British Houses. An approximate average among the German Firms would give:

3%

Piece Goods

General Sundries 4%

Paper

Exports.

5%

Usually a heavy loss.

As against this, it must be remembered that the goods

were all out of credit, and in case of a severe crises, the German Firma would be the worst effected. They un- doubtedly relied on the fact that they were so heavily

involved with British Banks, that the latter would have