1925-03-02 — Page 4

Tennis Flannels

Trousers Guaranteed unshrinkable

Shirts

Sweaters

Shoes

$12.50 $14.50, $19.50/

in Flannel or Cotton $6.50, $550, $7,50,

Coat or Fall over Styl 311,50, $13.50, $15.50,

With Crepe Babber Soles 56.70, $11.50, $19,59

Belts Scarves Socks.

Mackintosh & Co., Ltd.

MEN'S WEAR SPECIALISTS Alexandra Building,

Des You Road -

FLANNEL BLAZERS To anier from $25.00)

Hending the

take a

John

peq

Begg

The

Scotch Whisky

that has been supplied to sil

the Royal Falaces for 75 years.

By dyintment JOHN SBOG LTD, DIKIOUT Į ant

ليا ويسار

106, Paschach A, London, 1.043

JUST

THE HONGKONG DAILY PRESS, MONDAY, MARCH 2ND, 1925- HONGKONG'S TELEPHONES.

THE PROVISIONAL AGREEMENT WITH A LOCAL COMPANY."

We mentioned some days ago that dis- cassions had been taking place with a view to the transfer to a local, Company ur the local interests of the China and | Japan Telephone and Electric Co., Ltd, and that an agreement had been reached. This agrement is subject to confirma tion by the shareholders of the existing (London) Company and the approval of the kiiverngent of the Colony. *

quen

io paragraph No. 1 you refer to Your suggestion to the effect, that much? increase should be placed to the figure 1) charges on a message rate hasia," either had arrived at. for the plant, eta, and on or before completion of the proposed

new Plant and extensions.

The thus augment my figure of 1.135,000. Sy $103.776 is, unfortunately for such argutions of Plant, extensións, rates and so ment, impracticable, for 1. fud that, as I have emphasised several times far from being able to justify an in- in the course of our discussions, must be crease to that item i have, if anything, unfettured by any ideas preconceived deals with entirely by the new Company already erred on the side of time ither by your company or by any other inasmuch as the letter 1. revived from

| $900,000 is under date. Fane, 1921, where hub policy at this juncture, our

b

the Government in which the figer for interested in this matter at the

moment, in which relation it muss A HISTORY OF THE NEGOTIATIONS..

plaat is indiente n not to exceed | obvious that we cannot. commit a local. utility company to any particular aa tha Company has already beurfitted

ATL sole with referones to the Plant, and than by my having taken the 2000.c00 value objective at this stage of the prox was that it would be necessary for it as at 1992. Consequently. I worded a bring

proceedings the acquisition of the present un to be subjected to thorough tests before point in allowing themett aduitious, dertaking conditional, inter alin, upou a being taken over by the new company, E18,461 for the year 1992. However, as the fiovernment was not altogether in view of the fact that the state of the wich the authorities on the questions of the satisfactory auderstanding being reached satisfied as tits condition. In order so

plant is to be subjëet të the Liqvernment Basis upon which the new Company would Mr. Taggart had proceeded on the as- the decision of the meeting, held on te complicate the negotiations unduly representative's report (as the result of be permitted to operate Therefore the Actual rormation at the local Company is sumption that the plant was in good and Wednesday the 28th ultimo) previded ressurily subject to this contingency- chicient working order (as the company such report is to the effect that the plant Then again, paragraph No. refers claim it to be), but it world, of course, is satisfactory, and that nothing arises a pries to be paid for the shots of the require to bestechnically examined and to cerusion a material revision of the shares in the xisting company (39,781 satisfactorily reported upon before being The públication of the following state-purchased. Matters having reached the.186,000 figure. I would not. in fairness shares of £1 each). I must again. - phasize that it is not the intaction of aware that you claim the addition to those interested in the formation of a ment on the subject has been authorised stage above indicated, Sir George Gibbon, now think of reducing it. Fan- on the 30th January addresard the follow-plant made in 1924, but as I have point.

Hongkong Company to purchase shares

China and Japan

tions were taken into necsunt in arrive recommend as the purchase consideration and Eletric Co. Ltd. ing at my estimated valuation, but were 37,400,000 of which will be satisfied by epresents the consideration in dollars Hongkong, 30th January, 1925. offset by depreciation to the 31st Decet the issus of shares in the new Company) Dear Mr. TAGGART--I think it is desire her. 1924-that is to say, that assuming able and, in order to avoid the possibility the equivalent of £1,000 be added in the king were of the "business"

by Mr J, H. Taggart on behalf of the line latter to Mr. Taggart Telephumul "ut out in Schedule No. . the 1924 add the existing company: the guy I

proposed new Company,

With the advent of Sir George 8.1 Gibb (the Chairman of the Ching and

the undertaking, aut shares in the

TAKE A PEC: Driental Telephone Confany, Ltd. the should record in writing, as I have an equal sum for depevation should sing to paragraph 5. this raises ag

OF

JOHN BEGG

BLUE CAP

AND

GOLD CAP

DONNELLY

&

WHYTE,

BOLE AGENTS.

TEL: 636

ARRIVE'D.

FRESH SUPPLIES OF

HUNTLEY & PALMERS

PEEK FREAN

JACOB'S

FANCY

ASSORTED

BISCUITS.

THE SINCERE CO., LTD.

WHITEAWAY'S STANDARD VALUES

THE “DORMITORY” BEDSTEAD

This is a very useful Bedstead for Schools, Institutions, Hospitals, etc. Sanitary and Useful

STANDARD

Very Strong,

Size-6 and 3 ft.

VALUB each.

$8.50

PRICE

WHITEAWAY, LAIDLAW & CO., LTD.,

HONGKONG.

81011

the

was

of any misunderstanding hereafter that respect of 1921 additions, then at basting concern....We propose to pur-

done on the enclosed statement, the terms | deducted from the result in order to an which I am willing to agree-Yours very truly,

(signed) Grozax S. Gist J. H. TAGGART, Esq.

[Enclosure. }

arrive at the pries to be ruched for further question upon which I am like the plant it stands Contay trade wise precluded from binding the new Scheuls No. 5a).

In the matter of the properties, any, and whilst I have no reason tr> doubt that the new Company woulů mittedly you have some justification in naturally avail itself of the serviers of contending that I should have taken the the Oriental Telephone Company as its 30th January, 1925.

Duddell Street Property as the valua; agents, nevertheless this, is matter Terms to which Sir George, S. Gibb en

tion given to you by Mr. Bird (or which cannot be dealt with at this stage behalf of the existing Company is 360 per sq. ft.), whereas for reasons al of the negotiationss willing to agree with the Hong-ready explained

ned (based on the fact of kong Syndicate,' Subject to ap- our inability to dispose of the property proval of the shareholders

so long as the Central exchange is ingat

fair one.

of

ini

all the

Konnection.

characterised. and to get authority to charge on a Land the figure of 8453.119 for, gestion that the proposed new company

.

reserves

53,230

$1,183,050

Hongkong Government's representative being satin- factory to those proposing to form a local company, o the value of the plant be taken as

and Buildings 938,95 to 84, should take over the business of the exist and, in turn, the purchase consideration ing company as a going concern on the. shown by Schedule No. 5, from $1,411,300 1st July 125 If that method were ad- to $1,167,301.

apted, 1 suggest that the definite form In view of the fact that the figure to which it should take should be as fol which you are now prepared to agree is lows:

the $1,483,230 (should read $1,483.984).

Subject to the report of the apparent difference between us is there- fore reduced to $15,093. Consequently, I am of the opinion, and I trust tha You will

agree, that our negotiations You have now reached a stage at which the outstanding differ

difficulties should not prave a serious obstacle to a

Ples to a final and har- monious settlement.

At this juncture Ideem it opportune definitely to make it

"it clear to you that further concessions on the part of those tor whom I nct cannot in the circums

now reasonably be expected.

view in retrospect the protracted Moreover, I feel confident that if you negotiations dating from the visits i

the

lengthy and Mr. Parker Ness (and involved Reports, discussions and cor-

tances

net

additioris made Juring the six months the 1st January 1025 to the 30th June 19:25

from

Land and Buildings (as men- tioned on page 3 of this fetter) Stores in hand and in transit at the 30th June 1995 at

$1,155,000

8-191,333-

Japan Telephone and Electric Company, Lad, and of its parent company, the

argulations for the acquisition of the | Telephone undertaking in Hongkong by ja Company to be formed locally for that purpose (which, unfortunately, proved abortive when conducted with Sir | George Gibb's predecessor, Mr. Parker Noses, when he visited the Colony three

If after having given the above pro- (ygars ago) were revived in January, and

post your careful consideration, you are we have been authorised to state that 4-

still unable to see your way clear to a settlement has now been provisionally 1. It is proposed to form a new Com-ed in the laulding), I deemed it prudent effecting an agreement on the lines now rrangol which, it is hoped, will prove pany, to be registered in Hongkong, with tu pake the basis as 955 per sq. ft.. and indicated, it occurs to me that a basis. satisfactory to all parties concerned. an issued capital of. 85,000,000 in 600,000 2 still conaller the latter figure a very of settlement whereby practically uction

The

However, it is thought that difficulties recounte negotiations on behalf of loent shares of 816, to purchase and "carry on gentlenes inter-sted in the formation of the undertaking of the existing Con- what reasonable for as local wmpany ment following the course we have hither-

it might perhaps be considered safe with our endeavours to effect an a Hongkong Telephone Company were pany, to get a extension for 50 years

to decline to agree to a valuation made to pursued, may possibly be arrives at conducted by Mr. T. H. Taggart at the of the term of the existing licence to by a local architect of the professional by adopting the alternative method we request, of Sir Paul Chater, and we get an immediate increase of the unthor standing of Mr. Bird: therefore we are teatatively discussed in an earlier part understand that the conduct of the ised flat rate from £10 or its equivalent

to concede this point, thereby. prepared

I refer to the sug- argotiations. negotiations between Mr. Taggart and in dollars per exchange line to $105, Nir

Crorge Gibb (throughout by a spirit of courtesy and nicssage Pato basis, either on or before goodwill in a genuine desire to appre completion of the proposed new plant ciate and avereme the many diffienities and extensions, rätes which will he de- created by the controversies that un-quate do enable the new Company to pay doubtedy prejudiced the case when, asainimum dividend at the rate of

ar readers will probably remerater, it per cent. per annum on their issaed was under discussion on the former uera-capital after making all usual proper

THE PRICE

The price to be paid for the whole Mr. Taggart propated schedules to ex-of the shares in the existing Company plain the manner in which he had arrived 99,761 shares, of £1 rach, to be $1,183,20 at a figure for the sequisition of the payable as follows:- undertaking es a going concern, viz., that

140.ku fully paid shares of

$10 in the new Company.....21,400,000 the proposed new Company should take

Cashi over all the nauts (including profts for yrar 1921) and liabilities of the “per- soul Company as from the 1st January, 11-25, for a purchase consideration of

The puressers to take all assets $1,01304 (afterwards increased, to

1-12.301, #s explained in Mr. Taggarts and pay all liabilities of the existing Jetter of the and February. 1925, to Sir Company a from the 1st January, 19, | Grenge (libh). Meetings between Sir subject to payment to the existing Com Grunge Gibb and Mr. Taggart took place pany of the balance of the net revenue pretically daily, but an agreement on account for the year 1924 after deduction

therefrom of £7,500 18

time, you will undoubtedly arrive issue of One hundred and forty thosand the basis ala proposed was not found credit of the debenture sinking fund and at the conclusion that your Company Ordinary Shares of $10 each, credited as practicable. masinuch as Sir. George

cannot now so

so detrimentally affect its fully paid up, and the balance of the Gibb asked for an addition of $103.78 staff persion fund acam ta

own interests us to decline a settlement parchase consideration being paid in to be unde to the figure of $1.831,306 in

4.The Oriental Telephone and Elre-

tendered on AL basis considered by this eash. order to reconcile a question of rates of tric Company, Limited, who

triners of 28,077 of the shares of the leading men, of this Colony (many of

The new company would not, under exchangs. The proposed purchase con-

whom are in, positions that have the right of sideration of $1,435,0 equalled $178.04 existing Company

them from

taking benefit financially in 108, when taken at 88 to the (the rate nominating two Directors of the nor

way from

settlement that might adopted by the Telephone Company in Company one of which may act and at-ly favour the proposed new

to be its anal accounts of recent years), but tend Board meetings by substitute.

fair but 17 EX+

1 venture to think that as many of the 'its' sterling equivalent s 3.The

I venture dificulties which originally appeared to much as $1,024 18 would not be agents for rental Co., to be the sole codingly, not only a fai

to express this opini

opinion not in an be in the way of its adoption have 10s, per share at the current rate (sy agreed, for the purchase of requirements, endeavour to influence you

again discussions been cled and detailed

our closely (88.36); therefore, Sir George Gith naked (of the new Company outside Hongkong your own judgment in the case,uch to commend it

but

away, it has that the figure which had en auggested and New Territories, China and Japan that you may fully realise the prejudicial | much

I cannot help It will be observed from paragrapha effect that would thereby be created in thinking that it is now the best way in as a basis, of settlement, subject to nd- justment on the figures shown in the and of Sir George Gibb's statement the minds of the local public (who, it which we can arrive at a final settle 1921 balance sheet, should I increased that he was thes, w to $1,483,204, the must be remembered, will be share- ment and that it would avoid the posti

Tax figure of $1.545,172 to (by holders in the Hongkong company whe- bility say questions

say from 1.431.306 to $1,435,172. gurt alnitted that if the purchase con halving the &gure of $102,776 which bother it be promoted by you or by us, allocations of profits to the date of

transier of the the Company izust depend

undertaking June sideration were to be paid wholly in originally claimed as an addition to the and on whom the

consideration purchase

of for

its source of revenue). Furthermore,

I have also in mind that hy cash, and the present company required proposed

10257

the prescot com- sterling, then £178,991 10s. would, at the $1,431,308), but that the profits for 1924 with all deference I submit that your pursuing this course,

accessity ferent rate of exchange, coss the new were to be retained by the present com Company has already laid itself open paur might not be under the acc company approximately 81,335,172 (the pany; whereas, according to Mr. Tag to severe criticism by reason of the of going into liquidation, but that shoul figure now asked for by Sir George Cibh) gart's basis uny sums withdrawn by the conflicting statements made by its re- its Directorate, so decide it might con- but contruded that as it was proposed to company in order to pay a dividend, presentatives from time to time: this is tinue in being (otherwise, of course, than

supported by the authorita- any other satisfy 81:400,000 of the purchase con- to pay income tax, or for sideration by the issue of 140,000 shares purpose would (by reason of issets then tive statement made at the meeting held operations in the Colony of Hongkong on the 29th ultimo to the effect ld and territories in South China are con being reduced) result in a reduction of

that

cerned

for its present of 310 rach in the new company, credit the purchase consideration represented Mr. Parker Ness informed the Govern- assets the

holding of

of shares in the pow das fully paid up, no exchange ques

ment in March 1920 that the Company Hongkong Company tion arose, as (except for a small balance by 81,431,308;

was being run at a loss-in 'fact, 27en

not lose Bight of the fact that thin of about 230.000) no actual cash would

two years later, Mr. Parker Ness suggestion did not appeal to you at the actually gave the Government to under- tine I first mentioned it, but in the light be passing. Apart from this question, it

stand that the concern was practically appeared that Sir George Gibb did not gart's reply:-

of the present circumstaners, I am in- Furthermore at that fully realise that the purchase considera.

Mecclined to look upon it as the logical one particular stress was laid upon the to follow. Nevertheless, should it still tion proposed was arrived at on a'basis Sir which would give the new company the

fact that Committees appointed to report not appeal to you I trust you will renlin on the telephone question wer always in profits of the business for 1924, for he

it again

I am merely corfronted with the same. difficulty in actuated by a desire to pl! I can to wished to reserve £9,940 for payment of│⠀

submitting endeavouring to assess the value of the bring matters to д a-dividend in respect of that year.

successful conclusion asscta; namely that the company bad rather than that all our negotiations Therefore on the 28th January when a Dear Sir GEORGE Replying to your not disclosed the exact position of affairs should new prove abortive.

It would meeting was held in Sir Paul Chater's letter of the 30th January, 1925, cover. It is indeed remarkable that the Com- be a matter of some gratification to m

personally to see our discussions result

res

valuation to be agreed W pon

reserves forene consequent thereon) to the the resultant figure being settled by the

ar the

The following is a copy of Mr. Tas

Hongkong, 2nd February, 132. GEORGE S. GIBE, Kt., Chairman of the

China and Japan Telephone and Electric Co, Ltd., Hongkong,

this alternative scheme, take over the

profits, cash balances, debtors, creditors. debentures, or any of the liabilities of com the

existing company.

that

(30th

the

office (attended by Sir George Gibb, the ing a statement setting forth the terma pany, having at its disposal an experienen a settlement likely to redound to the

"

have

local gentlemen interested in the forma upon which you are prepared (subject, ed technical and Mr. Parker Nesk tion of a company in Hongkong, repre- of course, to confirmation by your share being so fully aware of the fact that the credit of all parties and I know that you smutatives of the Government and the holders) to dispose as a going concern | value of the Plant was necessarily the

would yourself

be поле

the leas delighted local Chambers of Commerce), the posi- of the undertaking of the China and main point at issue has not even yet, at so happy a result.

the fact that three have In

Avall conclusion, tion was that Me. Taggart was prepared fapan Telephone and Electric Company dispard, produced data setting forth the of this opportunity to give any ot

desire

myself arrangements Leing made with the Gov in Hongkong; on recript of which I basis upon which the company itself the spirit of courtesy that has through- ernment for a fifty years' franchise to a again placed the matter before the gen arrives at a plant valuation-neither out our negotiations characterised the

really farmed company, and for ap, tlemen, interested with me in the proeftached Puficient importance to

it appear that the Company has presentation of your case and for the proved rates which would provide posed formation of a local Company, negotiations as to produce schedules versations, by so patiently listening to

the tolerance you have evinced in all our con- te reasonable minimum return to the share have to inform you that, as the result

Balance the various angles of holders), that the meeting should ap of our consideration of your statement, sving the method by which its

argument I prove that the purchase consideration to the terms outlined therein are not found absence of auch particulars and

Sheet figures have been arrived at The

The deemed it necessary

to place before you, be paid to the existing company by the

in which relation I wish to Hongkong company proposed to be form- acceptable doubtless recollect that the Buen Dretty un of dasht bringing matters to s

of information has in that should our united efforts result fr be based upon the statements he had dificulty with which I was confronted evitably crested an atmosphere rendered and you enter into the new

successful issue prepared (and which had already gene in the matter of recommending that we it exceedingly difficult to those lacking the lines I have had the honour to submit new company or rally been approved ne being fair and should meet you as regards the difference the necessary technical knowledge of the to you, then you need have no hesitation reasonable), whereas, Sir George Gibb on of $103,776 was my inability to reconcile Plant to formulate definite ideas as to in placing reliance on the whole hearted behalf of the Telephone Company was an increase to the assets side of the the actual present-day value thereof. co-operation of my colleagues and myself not prepared to accept $1,431,336 as a schedule No, (setting out the manner Buch attitude on the part of the present in leaving no stone unturned with imais, but was willing to agree toin which I had arrived at a purchase company leaves po alternative but for us view to the promotion of the welfare of $1,595,172-plus, presumably, the amount consideration of 81,127:371-then in- to proceed on the basis of the figure of the new Company on lines beneficial to required for 1924 dividend.--

́creased by $4,02%, as explained in sche-8000,000 indicated by the Government the public and all others concerned.-I On the question of purchase cormide dile No. 5A; to $1,431,300), in such a There are one or two other"pointe" in ¦ am, dear Sir

George ration this meeting proved abortive. One way as justifiably to sscount for the your Statement indicating that we are

Yours sincerely. important point transpired, however, $100,778 in question.

vot ad idem, for instance-

(signed) J. H. Tandant.

.

to assure you

I