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55. Your Petitioner, accordingly, protests that, in the manner in which these new concessions to the China Motor Bus Co., Ltd., were granted, the same atmos- phere of secrecy prevailed as immediately prior to the developments of the year 1928. In other words, your Petitioner was kept entirely uniformed that such changes were even contemplated (with absolutely no opportunity of making representations) until, in fact, some time after such permissions from Government had been actually ob- tained by the Motor Bus Company.
56. On 28th March, 1935, however, due to the importunity of your Petitioner and its legal advisers it was arranged-by courtesy of His Excellency the Governor that your Petitioner's Chairman and General Manager should appear before and address the Executive Council.
57. This event took place four days before the proposals of The China Motor Bus Co., Ltd., both as regards route extensions and second class fares, became accom- plished facts.
58. The results of this belated hearing of your Petitioner's objections were entirely negative. It was pointed out that the route extensions had been already authorised and as to the question of second class fares your Petitioner met with the unsatisfactory reply that Government was advised it had no legal power to interfere.
59. At this point it is necessary to refer you to the Appendices "M" and "O" 60. The first is your Petitioner's General Manager's report to his Board of Directors as soon as confirmation of the news of the Chinese Press of 1st March, 1935, had been obtained. The Chairman of your Petitioner's Board of Directors by way of information and courtesy immediately caused this private report to be placed before Government.
61. In your Petitioner's opinion, the grave injustice from which it is suffer- ing to-day largely arises from an absence in Hong Kong of any legislation upon the lines of the Road Traffic Act of 1930 in Great Britain and that the Hong Kong Government is not adequately advised in such matters.
62. Your Petitioner begs leave to stress this contention by referring you to the two following short quotations from the report shown in Appendix "M" :-
"It is a sad commentary on the manner in which a highly efficient and long established public utility Company in this Colony can be treated that it was through a Chinese newspaper that this Company was first acquainted with the startling news, etc."
"It cannot be too strongly emphasized that the Hong Kong Government seems to be out of touch with modern policy as now pursued by the Ministry of Transport in these matters and that such a situation as that in which we now find ourselves could not arise in England today"
63. The other Appendix, "O", reproduces the Memorandum submitted and read by Mr. A. B. Stewart, your Petitioner's Chairman, before the Executive Council on the 28th March.
64. It will be seen therefrom that Mr. Stewart made a final appeal to Government, to this effect:-That if Government would withhold permission for the reduction of motor bus fares on routes competing with tramcars your Petitioner was prepared to be responsible for the expenses of a visit to Hong Kong of an official of the Ministry of Transport and so obtain an independent view of your Petitioner's claim to protection. This offer was not accepted.
65. As a result of the extended powers given to The China Motor Bus Co., Ltd., your Petitioner is now being intensively attacked in the heart of its system and, having partially recovered from the loss of a large number of first class passengers after 1928, now finds both its first and second class traffic diminishing to a degree gravely imperilling the company's revenues, and in such a way as to clearly in- dicate--if continued intensification of competition be countenanced-that your Peti- tioner's revenue will be reduced to the point where the capital now represented in its very excellent and costly tramway track and equipment will soon be unremunera- tive.
Figures supporting such conclusions, based upon your Petitioner's traffic re- turns for the month of April, are set out in Appendix "Q" hereof.
66. Traffic experts will accept the principle that adequately maintained and properly equipped electric tramways are the cheapest and safest method of conveyance for passenger traffic in large cities where such traffic is sufficiently dense to warrant a very frequent service of cars, and that such undertakings where long and successfully established should be afforded reasonable protection.
67. It should be made clear that throughout the Colony of Hong Kong the minimum passenger fare (either for trams, buses or other forms of road borne traffic) is 5 cents or multiples thereof irrespective of the fluctuations of the exchange equivalent of Hong Kong currency. In the year 1920 the HK$£ exchange was quoted as high as 6/2d. and as recently as the year 1931, the rate was at -/10}d. 68. It might also be pointed out here that the actual maximum 5-cent fare stage, through the heart of the City, of your Petitioner's tramcars is a distance of no less than 6 miles.
69. Although under considerable pressure to respond to these new motor-bus incursions by retaliatory fare-cutting tactics your Petitioner has no wish to embark upon that course.
70. Such a policy is counter to orthodox principles as accepted by authoritative transportation opinion today. Experience shows it to be wasteful and uneconomic and pushed to a conclusion must result in the crippling or extinction of one or both of the parties, to the inevitable detriment of the travelling public. In order, however, to resist attack and guard its interests your Petitioner may be compelled to adopt defensive action in the form of uneconomic fare reductions.
71. This, furthermore, would undoubtedly force your Petitioner off its pres- ent sound financial policy of setting aside annual reserves to meet the increase from 5 to 25% in the Government Royalty which becomes obligatory as from Septem- ber 1939. In recognition of its approaching future obligation this policy has been carefully designed in an honourable preparation for that eventuality and to preserve an unimpaired financial status of your Petitioner's stock over the critical years following this burden of heavily increased Royalty payments.
72. It may be properly mentioned here that total dividends paid over the period of your Petitioner's history represents an average yield of 9.8% on the original subscribed capital of the company.
73. Your Petitioner does not in any way suggest that the interests of its shareholders are so sacrosanct as to be paramount to other issues, but it is repre- sented that they are nevertheless entitled to proper consideration.
74. The original capital was subscribed in England and holders have borne the risks and burden of the early unremunerative years. In the course of succeeding phases of your Petitioner's progress its undertaking has become looked upon in very many quarters as a secure investment.
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