1930-03-17 — Page 7

HONG KONG TELEPHONE CO., LTD.

AUTOMATIC EXCHANGE SYSTEM TO START IN APRIL.

TRUNK LINE TO CANTON TO BE LAID DOWN,

COMPANY'S FINANCIAL POLICY REVIEWED.

The fact that shareholders of the Hong Kong Telephone Com- pany are well satisfied with their Board of Directors and officials was shown by the fact that only two shareholders-sufficient to move and second two formal resolutions—were present at the annual meeting held at Exchange Building on Saturday, with Mr. J. Scott Harston in the chair.

The meeting came at an important stage of the Company's history, as the change-ore: to the automatic system-which has had to be delayed a few months-is imminent and the Company hopes to have a trunk line servieg between Hong Kong and Canton in operation in a year's time. It is also hoped to enforcé the possibilities of a ling to Swatow, and, later to other Chinese cities.

Shareholders have certainly not much to grumble at when $ per cent. is paid when such a' bad business year as 1929. falls of the same time at the Company is launching out on a vigorous forward policy.

THE CHAIRMAN'S SPEECH.

The Auditors' Report. Addressing the. meeting the

Chairman said:-

it in turn will no doubt, became obsolescent in the course of time and will require to be periodically renewed in order that it may keep pace with the very rapid strides which are being made in the field of telephonic development

re-

THE HONG KONG DAILY PRESS, MONDAY, MARCH 17, 1930.

The Auditors Report is as fol lows: We have audited the books, accounts and vouchers of the Company monthly for the year

At the last annual general meet- ended December 31, 1929, and have obtained all the information and ing you approved the appropriation explanations we have required. of 825,000 to cbsolete atores The plant, fittings and stores, ren- serve, and you will observe that dered obsolete by the change of this reserve "has been utilised, in system, have been written off at the manner contemplated: for the valuations made by the Manager. purpose of writing off stores which In our opinion, the above balance

have become unserviceable in con- sheet is properly drawn up so sa sequence of the change of system. to exhibit a true and correct view The balance required to provide of the state of affairs of the Hong for the full amonut of 8971,298.07, Kong Telephone Company, Ltd., as shown under, change of system ac- Fat December 31, 1929, according to count after utilising the share pre- the best of our information and mium reserve and the Storee Ob- explanations given to us and as solescence Reserve, has been appro- shown by the books of the Com-priated from profts, and requires pany.Lowe, Bingham & Mat- your confirmation. thews, Chartered Accountants, Auditors: long Kong, Feliruary 10, 1930,"

Increase Pront $41,000. Referring to the accounts, you will observe that the profit for the year under review, carried to the credit of Profit and Loss Appro- priation Account, amounted to 302,200.26, which shows an in- ercase of $41,203.30 over the preced- ing year and is obtained after de ducting $105.051.00 for deprecia- tion; $3,500 for payment to Gov ernment of Royaliies, as required by the Telephone Ordinance; and 3474.87 for writing of bad debts Depreciation shows an increase of 897,107.34 over the previous year and the larger allowance in this connection is necessitated by rea- son of the capital additions to general plant made during the year in the normal expansion of your business.

This expansion, you will observe, "has resulted in the amount of Royalties payable to Government lieing $2,312 in excess of the pay ment for the previous year.

Bad debts continue to decrease -even though they were extremely small last year--and this, I be lieve, is judicative of the efficacy of your Company's system of de- posits, to which I have already referred from the chair on several previous occasions."

tion, notwithstanding its heavy Capital outlay in the purchase of the New Automatic equipment, and the reconstruction of its line plant, but the serious fall in the purchas ing power of the Hong Kong dollar mist of necessity result in a very material increase in both construc- tion and maintenance costs.

FORGED BILLS OF

LADING.

!!

Witness looked at the documents and saw some technical errors that no shipping men could possibly make, one being that the cost of the goods for shipment was reckon- ed on weight instead of measure-

INTERESTING EVIDENCE IN ment. The signatures witness szw

SHANGHAI CASE,

I would now refer to the subject of the replacement by the Company Continuing his cross-examination of its overhead wires by under- of Mr. Topas of B. Topaz & Co., ground cables in accordance with in the Shanghai Provisional Court, the terms of the Telephone Ordin- Mr. R. W. S. Winter, police pro- ance, and I feel sure shareholders

secutor, last week put further will be gratified to learn that not

questions to the witness and called only have all overbend wires in the two other witnesses, in the criminal City of Victoria been replaced, charges brought against J. Jonin, wherever practicable. by under-a Russian cammission ageat, of ground cables but, following a pro-attering forged bills of lading gressive policy, similar replacement covering a cargo of bristles and has been extended to districts out-

thus brought the case near a con. side the City limits. The compie clusion. tion of this work has only been rendered possible by the adoption of an intensive reconstruction pro- gramme and by the expenditure of large sums on new underground ducts and cables-1076.53 circuit miles of underground cable and 49.431 circuit miles of covered dis- tribution having been laid down during the year under review. In addition, a new submarine cable, providing a further, 100 channels of communication between · Hong Kong and Kowloon, was successful. ly laid in the early part of the year, and 464 additional exchange lines were connected up which, I think you will agree, is extremely satisfactory.

The improved service to Subscri. bera, resulting from the develop- ments just outlined, in very appar- ent from the records kept by your Company, although the full bene fits will not be derived until after the change to automatic working. when it will be possible to disso ciate entirely the old plant from the new.

At present these two plants must be inter-connected in order to provide uninterrupted service under bath the old and new systems.

Change Over to Automatic: This brings me to the subject of the date of change-over to automatic working. You will no doubt re collect that when I addressed 'you at the last annual meeting, I ex- pressed the opinion that, subject to shipments coming forward as promised by the contractor, the change-over would be effected, be- fore the date of the present meet- ing. Unfortunately, very consider able delays occurred in connection with the shipment of various por tions of the Automatic equipment, but the whole of the apparetus is now to hand and has been installed. in the Exchange premises, and we are promised by the contractor that the same will be tested out ready for operation not later than the last week in April. The work of

during the course of the proceed

The .-C. Daily News says that ings before Judge Kao, who was sitting together with Mr. Herbert, the Senior Consul's Deputy sud denly queried the latter's right to it in the gape, after Mr. Winter had replied to a question that Mr. J. A. Gray, manager of the Eas tern Underwriters against whom strong, allegations were made by counsel at the previous hearing, was a police witness and nst" ab independent one.

The accused is charged with uttering forged bills of lading covering 250 cases of bristles and ground nuts which were supposed to have been shipped by the N.D.L. Steamer Aller, from Tsingtao to Hamburg, and the alleged forgery was discovered when two sets of

bills of lading were presented to Melchers & Co., by Mr..J. A. Gray, who said that the goods were not entered in the manifest and could not have been aboard the steamer.

were forged. He told Gray that they were of ho value whatsoever, and asked where he got them. Gray replied from some Russians, and then left. The directors of Mel- chers when they heard of the in- cident instructed him to find Gray

and take the two sets of bills he had from him.

Signatures Torn out.

On February 18, the next day, asked for the bills, but the latter witness visited Gray's office" and

said that he gave them back to the Russians, whereupon witness stated that he would publish a warning in the papers. Gray, he said ask-' ed for an extension, promising to try and get the bills back again, and on the next day, or the day After, Gray gave witness two sets of bills with the signatures torn oft Asked about this, Gray said that the Russians had torn them, and Melchers then advertised in the papers that two other sets of forged bills ware being negotiated.

Question of Quality.

The next witness was J. A. Gray, who told the court that some time in February a man named Livitaky introduced the accused, Jonin, to. him." The latter asked him if he wanted to buy some bristles, at the same time displaying, samples of the merchandise. Gray said he told the accused that he did not want them, but would try and find a buyer, and later Jebsen & Co., who became the prospective buyers asked Gray whether he was willing to guarantee that the goods would be of the same quality as the samples. Inquiry About Decumanta. Witness said he was not willing to do so, but made inquiries at Melchers & Co., duly published Melchers as to the bills. He deni an advertisement in the papersed having business relations with warning the public that forged Topaz in the manner Mr. Winter bills of lading were in existence."suggested. As a sequel to this B. Topaz who had drawn Tls. 0,000 from the Equitable Eastern Banking Cor poration, as a loan against the cargo of bristle, after he was alleg. lading from Mr. Gray was in. ed to have "received the bills of formed by the bank that the bills

were forgeries.

The statement made by Topaz that he had given the money he received from the bank to Mr. Gray, was strongly denied by the latter, but admitted giving a re- ceipt to Topaz.

Counsel in the case were Mr. Winter for police, Mesar J. Schuhl and N. A. Ivanow for the sccused, and Mr. O. Fischer, who held a watching brief for Mr. J. A. Gray.

by the police prosecution, import After Topaz had been questioned ant evidence was given by Mr. W. Wascher, chief clerk to Mel- chers Co., who said that on February 17, Gray came to their Chinese clerks. office and spoke to some of the He wanted to the bills of lading he had were in order and ho was referred to witness as the

connecting all the existing suberri berg lines to the new automatic exchanges and the conversion of the magneto apparatus in Subscribers' premises has now been completed and has satisfactorily passed the customary teala. This work bas heen of very considerable magni-know tude, but notwithstanding its in- tricacy, has been carried out with a comparatively small amount of interference with the normal opera- tion of the service.

Appeal to Subscribers.

goods mentioned could not be found in the ship's manifest.

(Continued on next Column.)

Company feels that with the rapid to Swatow at a later date, as your strides how being made in the field of long-distance telephony, it will only be a question of time be fare telephone service between Hong Kong and all important cities in China, and eventually beyond, will belume an accomplished fact.

Ocart Procedure,

At this stage Judge Kao asked the prosecutor if Gray was a po lice witness and was told that he was. The Judge then said that it was a non-deputy case as no British interests were involved, and that though Mr. Herbert could sit until the end of the day's hearing he could not afterwards.

Mr. Herbert said he did not quite agreo with the learned Judge. Mr. Winter said that it must be a de- "puty case as the Council were pro-

secuting.

Mr. Schuhl repented his request that the bail be reduced to $3,000 from Tis. 10,000 as the accused could only obtain the former sura. He said that if a doctor would ex- fad tuberculosis. Bail money was mine him, he would find that he accordingly reduced and the case was adjourned to March 20.

MURDEROUS ASSAULT ON

WATCHMAN.

ARMED ROBBERY AT KOWLOON.

When the workmen of the Duro Motor & Engineering Company, 472 Nathan Road, were returning to work shortly before & a.m. on Satur. had been broken into and the day, they found that the premises Chinese watchman strung up with wire

The Balance Sheet. With regard to the balance sheet, you will not.ce that general reserve account will stand at $995,000 i you approve your Directors' recom- mendition that $30,000 be appro- pristed thereto for the year under review. That account is represent- ed on the contra side by invest- ments, and I am sure that your Directors' policy in javeating the reserve in securities outside the business will commend itself to all shareholders, since the adaption of that course, where possible, is in conformity with the principles of sound finance. Unfortunately, how ever, your Company cannot, owing to the terms of its franchise, credit the reserve fand with the interest carned on these investments and this, I think, emphasises the point to which I referred at the last annual general meeting regarding A large amount of work will re- the inadequacy of an annual appro main to be performed after the priation of 850,000 to general re-

change of system,, namely the cut- serve when your Company's author-ting away of the underground cable sed capital is 85,000,000 and when connections to the old Exchanges for the amortisation of such amount obviously provision should be made and the elimination of the magneto- operating feature from the tale over the period of 50 years which phone instruments, but this work constitutes the tenure of the fan will be so carried out as to cause chise whereunder your Company the minimum of inconvenience to operates-in which relation it must Subscribers. be remembered that the Telephone Ordinance stipulates that, viša-vis modern inventions, your Company must so conduct its business as to

I would ask all Subscribers to

I now formally propose that the co-operate closely with the Com-

Report of the Directors and the provide as up-to-date a telephone pany-particularly during the few

Accounts for the financial year end- Obsolete Plant.

service as it would provide it its days before and after the change-ed, be adopted, with the appropria.

ing December 31, 1029, as present-mises, franchise were perpetual. Turning now to the Prait and!

over in order that the inaugura- Additions to land and buildings tion of the New System may be Loss Appropriation" Account, your amount to $14,336.60, representing smoothly accomplished and the full Directors recommend the adoption in the main the balance of expendi henefits of automatic operation of the appropriations shown, and I would like to direct your atten- Building,

ture on the new Kowloon Exchange made immediately available to the tion to change of system account during the early part of the year.

which Was completed Telephone Public, Subscribers can which provides for the writing off,

best do this by paying careful at as at December 31, 1929, of those amount to $337.235.55, whilst auto-

On general plans the additions tention to the instructions issued assets which have become obsolete matic plant. preliminary expenses

by the Company for their guidance owing to the imminent approach of

and by taking the opportunity of now stand at 9072,830.43, which visiting the interesting demonstra- the change-our to automatic work- latter sum will be incorporated in ing, to which I will refer later, general plant account when the

tion models which the Company has Under normal circumstances ob-

new system becomes operative.

specially constructed to provide solescence would, as far as practic

full operating instruction to tele. ..Coming now to the cash position, able, be taken into consideration in you will observe that your Com-

phone users.' fixing the rates for depreciation for pany is carrying an overdraft, the various classes of plant but which, at the end of the financial as you, are aware, under the terms year under review, amounted to of the Company's franchise a limit 388,010.46, and this overdraft will is fixed as to the maximum amount be increased as further payments to be charged for depreciation in for the new plant are met. This telephone service between Hong any one financial year. It was con- question of finance has recently Kong and Canton, and, subject to' sequently not possible for your engaged the careful consideration Company to provide for deprecia- of your Directors, who have decid-ject, it is possible that the trunk, Government approval of the pro- tion, in the short period which has

ed that it will be necessary to elapsed since its inauguration on make a call of 32.60 on the partly proximately one year from date. service will be inaugurated in ap July 1, 1925, on a scale sufficiently paid shares of the Kompany on extensive to enable it to have re- June 30, 1930. Formal notice of tired, through that account, the whole of the assets which have be such call, as required by the Ar- come obsolescent by reason of the ticles of Association, will be duly change of system, especially in view given to all Membare.

scription Rates,

Canton Trunk Line, Shareholders will be interested to learn that very definite progress has been made in the negotiations for the establishment of a trunk

If the work is carried out in the manner contemplated by your Company, it should result in 24 lines, operating on

was unconscious,

a window frame behind the lavatory door. The unfortunate man who was in a very serious condition, was bound band and Foot and a towel had been pushed into his mouth and secured behind his head as a gag. He was secured to the frame with electrical wire, a supply of which was on the pre- The police were sent for and the tions shown in Profit and Loss Ap- | watchman, who balance of 8112,627.87, remainingpital. propriation Account, and that the was rushed to the Kowloon Hoч- On investigation it" WH at credit of that account, be ap found that 807 in cash and a Royal propriated as follows:-Payment typewriter, valued at 3180 had been

stolen. of a Finul Dividend of 4 per cent. making a total of 8 per cent. for the year, 891,982.70; Carry forward shall be obliged if a shareholder. to next Account, $30,635.27; and I

will kindly second such proposal, whereupon questions as to the Ile- port and Accounts may be raised.

Mr. J. P." Warren seconded and the resolution was carried unani- mously.

The proposal to accept the Re port and Accounts, which was 82- conded by Mr. J. P. Warren, was carried unanimously.

This concluded the business of

The chairman stated that divid

OTHER BUSINESS. The Hön, Dr. R. H. Kotewal and Mr. D. H. Blake, retiring Directors, were re-elected on the motion of Mr. E. M. Raymond, se conded by Mr. D. H. Toilsa.

Meesre. Lowe, Bingham and Mat- thews were re-elected Anditors at ano-delay a salary of $2,400 per annum, on basis, being available for telephone the mation of Mr. E. M. Raymond, of the very comprehensive pro- Hope to Maintain Present Sub-

calls between the two cities. These seconded by Mr. D. H. Tellan. gramme of nedernisation and ex-

lines will be carried in a special pansion carried out by the Com-

underground cable, and consequent- the meeting. The results of the Company'sly there should be no interruption many since its inception. Your Directors, therefore, after ocnsulta operation under the new automatic to the service even during the end warrants are now ready and tion with your Company's auditors, system during the present year will worst weather conditions. A ser may be obtained on application at decided to utilise the share pre- have to be considered before it will

vice operating on these lines should the Registered Office of the Com mium reserve for the purpose of he possible for your Directora to

prove an inestimable boon to mer...

pany, extinguishing the obsolete plant ascertain whether increased rates

chants in Hong Kong and Canton, Supporting the Chairman were account, and I feel confident that of subscription are necessary to who would then be able to get into Mr. J. H. Taggart (Managing shareholders will endorse the con- enable the Company to receive a

direct and immediate communies Director), the Hon. Sir Shou-son servative policy of your Board in return on its investment in the

tion with each other for the trans. Chow, the Hon. Dr. R. H. Kote this connection, particularly baving manner contemplated by the Tele-

action of business. In the trunk wall, C.M.G.. LL.D., Messrs, R. G. regard to the fact that, although phone Ordinance. In this conacc 'cable referred to, it is the, inten- Shewan, J. P. Warren (Directors). your new automatic plant will in- tion it is the earnest desire of

tion of your Company to make pro- Mr. J. P.. Sberry (Manager) and corporate the latest developments your Company to maintain, if pos- vision for the installation of lines Mr. W. L. McKenzie, A.Ç.A. in the art of telephone engineering, sible, its present rates of subscrip (Continued on next Column.) - (Secretary.)

•

CRIPPLE" IN DOCK.

MAN WITH LONG LIST OF CONVICTIONS.

A crippled Chinese was sentenced to four months' imprisonment at the Central Magistracy on Satur- day on charges of having in his possession articles used for the pur- poses of picking pockets. Dalen. dant had many convictions on bis record, and has been known to the Police for the last eight years. In 1929 he served a sentence of six. months.

ADVICE FOR INVESTORS,

READERS

are

are reminded. that inquiries relating

to

market the share answered on page 11 every Tuesday by Kutan." Let- ters should be sent to this office, and must be recom- panied by writer's name and address, not for publication. Letters should be addressed to "Kufan," care of the Editor.

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