1925-07-20 — Page 3

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IN

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·IN·

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ADDED ATTRACTION :-

(6

SCHOOL DAYS"

(COMEDY IN TWO 'REELY) AND

THE HONGKONG DAILY PRESS, MONDAY, JULY 20TH, 1925.

WHERE BLACK IS WHITE" (SCENIC).

USUAL PRICES.

WORLD THEATRE

AS YOU WERE.

JUNE SETTLEMENT TO TAKE PLACE ON JULY 23RD, RETURN TO THE ORIGINAL PROPOSALS: BUSINESS TO BE RESUMED · AS "USUAL.

NO ANNULMENT OF CONTRACTS.

Shortly after the Stock Exchange closed it was announced that the Settlement day for Juns had been postponed from June 23rd to July 7th.

The next step was the publication of a draft Ordinance legalising the postponement from June 23rd to July 14th. This draft Ordinance, however, underwent several modifications before it was introduced to the Legislative Council on July 9th. When it was read the first time it extended the period of Settlement over four days-July 14th to 17th in- clusive. Subsequently this Bill was dropped and on July 18th a new Bill was introduced, and read a first time, postponing the Settlement to July 23rd, fixing the July Settlement for Jaly 28th and making certain other arrangements to facilitate the earrying over of shares until September.

This Bill came up for its second reading on Saturday, July 18th. The Government had announced that it was prepared to hear any repre sentations that interested parties might care to make on the subject and the result was that all available space in the Council Chamber was filled by members of the Stock Exchange and others. When the Council weat into Committee to consider the details of the Bill, Mr. E. Zeitlyn, re- presenting a hundred business men, urged that the Jane Settlement should be annulled. Mr. W. E. L. Shenton, on behalf of the Hongkong Stock Exchange and the Share Brokers Association, argued that the Council should confine themselves to legalising the postponement of the June Settlement until July 23rd,

This inter course was agreed upon. In Committee practically every. thing was taken out of the Bill that had been added since the first original draft was made and the Bill. as ad eccond time, was to al intents and purposes a replica of the Bill as published on July 7th.

Presumably this Bill will be read a third time and passed at the Legislative Council to-day. The effect of it, as far as legal points are concerned, will be to make the position on July 23rd, when the Stock Exchange re-opens, similar to that which would have obtained if the to be re-started from the point Exchange had not closed. Business at which it ceased.

were to

or

CD.

2

After references had been made to the these would be of a greater value than tragedy at Po Hing Fong, which are re-such shares are likely to have in Septem ported, elsewhere in this issue, H. E. theber when the compulsory measure of Governor at the meeting on Saturday selling which will be indulged in by announced that the Council would go everybody involved is likely to reduce into Committee in order to hear any those shares, so that the honest investor views of interested parties on the June who has been prudent and far-eing, and July Settlement Ordinance, 1925. will, at the end of September fad ahimself with securities upon which he will not "ANNULMENT ADVOCATED.

be able to raise the sums necessary Mr. E. ZEITLYN: I appear on behall either to revive industry or to carry it of more than 100 business men of this

- SEPTEMBER VALUES. Colony, who have bought shares, which

have beeta delivered

If the settlement is entirely cancelled settled on June 23rd last, and the repres sentation, which I have been instructed the shares will still have a value and it is hope in the circumstances that to urge upon Your Excellency and the euch value is likely to grow, whereas in members of this honourable Council, is

the other circumstances it is likely to that the spirit of British legislation be depressed. These are the considera- which is the greatest good of the greatest number may still be achieved, and Eertions which I have been instructed to lay cured by legislating so that the smallest before you, Sir, and this Hon. Council measure of harm may be done to the in the greater interests of this com munity, and particularly by reason of fewest in number. I am to urge the fact that if legislation with a retros. bring before you for your consideration the proposal, that instead of the legis-pective effect is to be indulged in, it may be indulged in for the greater good lation which is now before this honour of the greater number, or, as I put it able Council, there shall be an absolute annulment of all contracts for the June inversely as the beginning, that the mea sure bf injury be limited to the few in Settlement. The annulment shall not ex-

number. tend to July, August and September

Before I resume my seat, I have been Bettlements, because it is only the June Settlement that involves a very consider asked to express the acknowledgments of those whom I represent for the opportu- able number of people in this Colony. The considerations which I have been nity, which this Hon. Council has aferd. urged to bring to the notice of this honoured them on this and a previous occasion for expressing its view-an act which able Council against the proposals em-

makes this Council more truly an inquest bodied in the BiH now before it, are as follows:-In the circumstances of the pre- of the people of Hongkong and its de- went case it is wholly impossible for the pendencies. business community to find the sum neces- sary to pay the amount involved in the difference between the Bat rate and the contract rate. The springs of credit have dried up and that amount is wholly out of the reach of the business community involved. Secondly, even if that amount impossible though it be were to be found, the difficulties that are to be faced by the community are so large that there will be no end to their liability by the payment of the difference between the flat rate and the contract rate, for there will still be the amount to be found which may be due in September In the in- terval, it may well be, that interested parties may depress the shares."

NECESSITY TO SELL

VIEWS OF THE STOCK EXCHANGE.

Mr. W. E. E. SHINTON: Your Excel- lency and Gentlemen,-I am representing here the Hongkong Stock Exchange and the Sharebrokers' Association. A num- ber of meetings anve beca held by these Associations and at a meeting of both Associations held yesterday, they came to a decision, by 36 votes to 1, to ask Your Excellency and this Council to modify the Bill that is at present before you. The desire of these two Associations is, should Your Excellency and this Council see fit to legislate in respect of the June Satlement day, it should be to legalise the alteration of the June Settlement date from June 23rd to July 23rd and also to declare the contracts which were But even if it is not done; if it is made for the old Jure Settlement, June counsel of self-d, valid in the same way as if they possible to conceive denial being indulged in by those whose had been made for performance on July avocations are on the stock exchange, the 2rd. I would also like to point out to necessity of those who are involved direct Your Excelicney, if I may, and this. with the interests of their clients who Council, that as regards every one of in September: will be bound to find the these contracts the brokers are personally difference between the contract price and responsible for the performance of them. the value of the shares on that date will, If Your Excellency and this Council "see- in itself, depress the shares, because every-ft to adopt the legislation in the mode I one involved will be bound to make a have suggested, it will be left to these reasonable effort to sell shares in order two Associations to settle amongst them- to find the money necessary. That, as wlves the contracts as between them- the Hon. Council can easily see will, in selves, their principals and their agents. itself, carry with it a further depression This proposal, Your Excellency, would carry with it the following eliminations. in the price of shares.

in the present Ordinance now beforc you:

Iy

It is not in the nature of a threat, but it is in the nature of the choice of the

Section Sub-sections (a), (b), (c), lesser of two evils that the business com. munity whom I represent will have to e) and (f) delete, the balance remain.

Sections 3, 4, and 5 would, stand. Ask itself whether it will not be more

Sections 8. 7, 8 and 9 would be honest and whether it will not be to the better furtherance of the trade of eliminated; also the fat rate would dis the community generally if, instead of appear from the Schedule of the Ordin- meeting the impossible, demand which ance.,

the difference between the Bat rate and

Now if legislation, Your Excellency,

sanul

the contract price plus the unknown was adopted in that form, it would meet quantity which will in all certain prob- a part of the argument raised by my ability be wanted in September puts learned friend, Mr. Zeitlyn, because the upon them-whether it will not be a wiser continuation to the September Settlement and more honest course to take the and the possible continuation afterwards The only point heroic measure of seeking relief which would be eliminated. the bankruptcy jurisdiction of this where we are in issue, is as Colony affords. If, on the other hand, ment of the contracts. We do not know this Hon. Council takes the view which who these one hundred business men are, it is my duty to urge upon it but I can only say I am sure my two Inne Associations regard it as extraordinary, that

the the contracts or Bettlement be cancelled, the number that in a time of emergency like this, of people who will be involved are there should be one hundred business few. Secondly, the profits which they are men, who are likely to repudiate the con- losing are paper profits only. Thirdly, tracts they have entered into

H.E. THE GOVERNOR Mr. Zeitlyn, those who have sold their shares and

And that the buyers cannot take them would you like to supplement your re- up would still retain their shares and marks in any way!

SOURCES OF CREDIT DRY.

of contract will result in blackoning the nama of Hongkong in the face of the commercial world.

Mr. ZEITLIN: If I may, Sir, I would

Hon. Mr. Hozydak: The matter has like to address one remark with reference to what has just fallen frommy-friand, not been discussed by the Committee of Mr. Shenton, who is surprised to learn the Chamber because it has never been there are one hundred business men of definitely brought before it It has been" this community who desire to repudiate informally discussed, and I think I am right in saying that as far as the ChamI- their contracta, «*

Your Excellibey and this Hon. Couneti ber of Commerce goes it would view with will not forget that this legislation has alarm the principle of renunciation been induced by a breach of contract on either in this matter or any other It the part of the Stock Brokers Associa would form a precedent for repudiation Lions owing to the circumstances which of all contracts in every shape and form. H.E. THE GOVERNOR: My own feeling have unfortunately arisen in the Colony, and the businesa men feel that in the is one of reluctance to deal with this circumstances that have arisen, that the matter in any shape or form, and I think fact, pateat to everyone that the sources the wisest course to take is to limit inter- of credit are dried up and that it is to the ference to a minimum. Personally I greater interest of this Colony that its think the wiarst course is to take the legitimate business should first of all be simple line of approving the postpone fostered rather than stock broking busi-ment of the June Settlement until such ness, that without any desire to re-other date as may be regarded as most pudiate them, they think that if there is convenient. That is practically what to be legislation, the legislation would do was proposed in the first Bill brought be the least measure of injury if it proceed fore the Council which was withdrawn. ed on the lines of the annulment of the after representations from various quar June contracts only, rather than on the ters interested implying something like lines which are now before this Hon. settlement by consent, which I'can now Council, and embodied in the Bill before clearly so is not the case.

these lines the evil seems t, because

THE GOVERNOR'S SUGGESTION. to be without end, and the interests of the community will demand an act of surgery once and for all to get rid of this difficulty.

They will be compelled to seek the re- lief which the jurisdiction of the Courts afford them unless this Hon. Council in its wisdom, having given considera tion to the proposals I have had the hon. our to present to-day, see fit to legislate that the June contracts at any rate Dat the July or September contracts, be cause these involve few persons-shall be got rid of and the evil consequences which must fow from it by an act of Donulment.

Mr. SHEYTON: Sir, "There is one more comment which has just been pointed out to me by a member of the Asariation, that is if the June Settlement contracts are aanulled the annulment will carry with it a great number of the contracts for July, August and September, which have been entered into based on the June

contracts.

Hon. Mr. HOLTOAR: "Speaking per- gonally, Sir, as one who is not interested in this question except academically, for the protection of trade done in the Colony, the sanctity of contract is a thing, which, I think, all of us agree cannot lightly be interefered with or broken. I have felt from the first, Sir, as you are aware, extremely diffident about this Council dealing in any way with this question, and I have felt from the first that the only manner in which it could be dealt with is to legalise a day for the Settlement, which became im possible on the day it should have taken place owing to the state of emergency existing.

H.E. THE GOVERNOR: What I wish to

H.E. THE GOVERNOR: The point for the Committee to decide is whether it would prefer to continue with the Bill at present before the Council or whether it would adopt the course suggested by Mr. Shenton, which practically amounta to going back to the previous edition of the Bill. My own inclination is to adopt the latter course. If that is the view of the Council the practical steps to take are that the Committee having come to a decision, the Council will resume. The Bill must be formally read a second time and amendments can then be inserted in Committee afterwards

This suggestion was agreed to. Conn. cil resumed and the Bill was rend a "Then Council went into second. time. Committeo again to consider the Bit clause by clause and as stated, prac.. tically everything which had been added since the original draft was ärst pub- lished, was cut out.

H.E. THE GOVERNOR: Under the Royal Instructions, if there have been no amend. ments whatever, or only miner amend ments to a Bill in Committee, that hill at the one sitting the Council, if meta- may be read a third time and passed bers agree. I fear that it is not poss ible to state that only minor amendments" have been made in this Bilt. The only question, therefore, is whether it shall be declared a matter of urgency in order that it may be, read a third time now, I feel myself handicapped by the Stand ing Orders. I cannot on my own initia- tive declare this to be a case of emer. gency. But there is nothing whatever to prevent the Council meeting again in twenty minutes time.

After some discussion it was decided that the Council should meet again to- day (Monday) at 12.45 in order that the Bill might be read a third time and pass

ascertain, Mr. Holyoak, is whether you, As representing the Chamber of Com merce, share the view which I confess I do myself, that any form of repudiationed.

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