1937-02-27 — Page 23

THE HONGKONG TELEGRAPH. SATURDAY, FEBRUARY 27,

Hongkong and Shanghai Banking Corporation Annual

Meeting

1987.

POLITICAL SCENE DOMINATED BY SINO-JAPANESE RELATIONS

China More Than

Ever Determined To Stand Her Ground

"NWARRANTED Interference" with the legitimate

functions of the Chinese Customs Administration was mentioned by the Hon. Mr. J. J. Paterson when pro- posing the adoption of the Report and Statement of Accounts of the Hongkong and Shanghai Banking Corporation.

* The Customs Administration has throughout the year been confronted with unprecedented difficulties in North China, and the integrity of the service has from time to time been seriously threatened," Mr. Paterson declared. Relations between China and Japan dominated the political scene, he added, and the outstanding feature of the year was that China had maintained the status quo.

"In spite of difficult periods she has shown that she is more than ever determined to stand her ground," the Hon. Mr. Paterson said.

millions

¿Continued from Pape 1)

ARTIFICIAL BOOM

the

has

HION, MR. J. J. PATERSON (Photo: Kobra)

these will be melted down or come

the t

ro-

now

ot

current In

amounts of

and system.

come

û

well-regulated Judgetary

PLAYTHING OF POLITICS Without such a basis, "manage- raeat," le monopolies, tends to be- of politics, the plaything instead of following natural values. Moreover, one kind of "managemem" leads to another. It becomes a kind of whirlpool drawing into its control industries, imports, exports and so on until rigid state control reigns supreme.

We, of course, realise that there BFC few countries with a completely independent Central Bank system und that, consequently, politics often play a permanent part in currency matters. For this reason it will be obvious to you that very great im- portance attaches to the setual terms

the

now Co

Central Reserve Bank which will be keenly scrutinized all who are interested in China's currency & finance.

of

Ach

by

MR. V. M. GRAYBURN

If conditions. In China keep up the

It is recognised that the Customs steady Improvement which has been made recently, and if unification of Administration have throughout the

and country

maintained

year been confronted with unpre- internal strife is avoided, perhaps cedented difleulles in North China, China will be more willing to allow and the integrity of the service has of from time to time been seriously free piny to the natural forces

the

.

supply and demand. The signs of threatened.

the recovery crops throughout the coun-

are clearly apparent and the UNWARRANTED INTERFERENCE

provement

In

arc

con-

Customs.

loans

the Chinese Maritime

j

never-

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late the hands of the authorities.

In due course the Government is expected to issue silver token coins, But none of these have as yet been minted,

boon. try try have been

grent

But by the exercise of great resolu- dld at time tlon, coupled with lact, Sir Frederick urrangements with the United coming as they states made by the K. P. Chen when exchange And Just been Maze has succeeded in maintaining Mission last summer, full particulars fixed at a reasonably low level, and the authority of the Customs Inspec- at which have not been revealed, when the demand for China produce torate in the midst of much political provided, so far as is known, for the was improving abroad. As a few confusion and unwarranted Inter- terence with its legitimate functions. purchase by the United States of

ites of Instances, we may mention the im-

Chinese commodity The Customs Service have a fine re- regular and substantial

have Considering that part of the read-lo Japanese on various occasions in liver at the average monthly world prices, the rise in yarn, the demand cord and again and agai Justment of 1015 had to take place different parts of China, and there prices, while China an her alde agreed for piece goods which has resulted in remained practically the only outward

caused by

of closed during 1030, the difference in our were also set-backs

and visible sign of the prestige and cotton- and #gures is not so great as one might attitude of the other side, Finally enlarge the use of silver and main- the re-opening

an independent currency system mills, and encouraging progress re- sovereignty of the Central Govern- of Chiang Kai-shek at have expected and can roughly be the seizure

inked

foreign

ment in regions where otherwise in- to any

monetary ported by utility companies. stated

follows: On to be us

the Slan and the subsequent develop-unit. Thus it will be seen that silver States

Shanghal is, however, still faced dependent regimes existed. This re- Habillen

alde Notes and Current ments in Shensi so pre-occupled the has not yet been entirely cast off, with one serious handicap to entire cord has considerable significance Accounts are up some $8 and $89 Government that discussions were though its future Influence in Chinn recovery in the deadlock that exists from a financial standpoint and has

white Fixed held up and the negotiations be- respectively,

In regard to its mortgage and real contributed very largely to the con- seems likely to be smail, Deposits are down $20 millions, and tween the two countries remain for

The foreign banks, with the excep-estate problem, with which is boundfidence placed abroad in assels Investments and the moment in suspense. among our

over up the question of the right of land-secured on tion of the Japanese, handed Loans show increases of $39 and $59

vis-a-vis tenant. There THE SIAN AFFAIR

all their silver against legal tender lord

in million cach, as against a decline in

the laws governing momalies notes early in the year, but no in- The seizure of the Generalissimo formation Bills Receivable of $20 millions.

The last published financial report 1s available us to the these mutters which require to be nt Stan on December 12th, which the actual stocks now held by the Chinese straightened out.

of the Chinese Government related to Chinese property Chinese now refer to as the Double Government. Considerable amounts owners are just as much affected as the fiscal year which ended on June the 30, 1935. The deficit for that year It is generally agreed that the Twelfth affair, came as a great shock have, of course, been disposed of foreigners and we trust that

will deal was $190 millions. As regards the trade depression which developed in to Chinu, and although he was re-

The legal tender note issue at the Legislative Authorities 1929 has now moved away from the leased within a fortnight, a tragedy end of the year was about $1,100,- with these points shortly, as we be-year 1935-36, an official statement In fact, was at one time feared. I believe 000,000, which excludes the issues lieve they are being urged to do, has declared that the deficit was greater part of the world.

larger than the previous year, 1938- Generalissimo that almost Il-mened word "boom" that the

of the commercial banks, whose notes Dictator.

CHINA'S FOReign debts theless the budget for the year is again being used in regard to con-pudiated the title of

All bay

have not yet been entirely recalled, ditions in some countries, particular- the same his Influence is felt every-and of the Farmers' Bank, the nos

posi- Burly last year un Internal Debt 137 only provided for $125 millions as ly in England and the United States, where in China, and either directly tion of which is somewhat obscure. Conseildation scheme was presented proceeds from loans. Without official

gures it is Nevertheless, there is a wide reall-ar indirectly his hand can be traced According to the reports of the Cur- to and accepted by bondholders,

is impossible to say more. but the recent of must the outlook is still besind

Improvement sation that

The THE LATEST DECCA & BRUNSWICK RECORDS essive rency Reserve Board, fully 60 per whereby the interest rate on domesticu progressive obscure; that there is an artificiality schemes of development which have cent, cover against the notes of the bonds was reduced to

per cent, and purchasing power of the

have a favourable effect on revenue should people about the boom, if it can be called bren initiated during the last few Government Banke is held in "cash," amortisation schedules were

that in most such;

countries the years. He has done much for China, which term includes foreign curren-siderably extended. About the same receipts, both of the Internal Revenue word is applied with very little real and his removal would be a serious cles. These legal tender notes are time a Recovery Loathe Government through an increased demand for in- $340,000,000 Administration and the Customa, it is limbic to dis-blow to the progress recently made. that basis; and

every province was placed with the appear like a pricked balloon if steps

throughout China in varying degrees Banks. Since then the Government ternal consumption goods, as well as Prior to the Ston incident the are not quickly taken to pat right

seemed to be reasonably

popularity and they are steadily have had no recourse to the domestic for imports.

References have in past years been bond murket but have covered their certain basic economic factors which country

But apart

apart quiet and the Central Government replacing other forms of currency.

requirements by other means, There more by my predecessors to the great are known to be

awry. from ecotumle factors there is also firmly installed.. but since then there

have, however been-n--number of munications in China. The curuis- the political situation in

has again been uncertainty, though Europe

Sir Frederick Leith-Ross has stated provinclat and Railway bond issues, munications in China. The cumuis- which gives rise to hesitation if not their site it the cut that the Chinese Monetary reforms some of which have been secured on

tive affect of these developments is alarm. Our Home Government are Executive Committee just concluded have been justified by their results. revenues of the Central Govern- now making itself felt, and the coun-

try is being opened up in a difficult facing a very

Everyone

remark- will agree that so far there ment.

able way. It is gling to preserve Europe from get-

Excellent progress has been made china by raliway, by motor has been no hitch, but rather there

18 now

possible to cross iing embroiled in a general conflict,

sign of skilful throughout the year in the settlement Chin

or by every and the mang political economic I must before passing on mention has been

and

telephone or problems which they are facing are the change, which has taken place management by the Central Bank of foreign debts in arrears. Apart air. It is possible to

Occasional political scares have from the steps taken to clear off

10 complexity.

in the status of Kwangtung, Here used sp

manipulations, but numerous commercial debts due by phone direct from here

and from Shanghal to appalling in their

caused speculative reller that

are particularly the official rate has nevertheless been Government departments, the initia-Japan, Nanking, Hankow or any one my task to-day in Hongkong we is not to review the situation as it affected by the transfer of centrol, maintained without

Europe during the und

Broadcasting stations are almost ex- of the Bank of England in forming a past year. What I am called upon derable interest and importance to

Government Banks

oved Chinese Railway Bondholders Com influence is being widely felt, for

cessive In their number, proved

but their to direct your minds to the us. We were glad to see how firm-overnme to do is

instance, in the broadcasting of countries in which we operate and ly and yet adroitly the Generalissi adequate. During the whole of 1930 miltee in London has proved to be of

the rates in Shanghal for

pound great value

assistance, and and have remained

As a result of negotiations initiated market prices to up-country farmers ing last summer, and while we do

difference of only We do 1/2.19/32d.. a and Indeed do not want, 11/3 not expect,

thumb of the middleman. while the US. Dollar rale ways, terms of readjustment the 11/32d., wh very rapid changes the situation is bus still too impermanent for that we differed from 20% to 30%. These T. P. R. Loans, the Hanan Railway

can be attributed in part Loan the look forward to close collaboration to fuctuations

Loin the Lung Hai Railway Loans Let us start off with China. The between Hongkong and Canton in all york cruss rate. I will deal with the Loan have been recommended by the const

In the London/News and the Canton-Kowloon Railway From the Butik's point of year 1930 has in some ways been inter-connected

the progress in matters has again

and trust trade figures Later Lypical of recent years. It

but It is

Is at Committee for the acceptance of Bri- construction been one of changes, bright periods that the good foundation laid by sinus that the lowered rate of ex-ish Bondholders. These offers haveterest. Since the present Minister

and His Excellency Sir Andrew Calde- and periods of gloom, mvertheless the cott, when he visited Canton last although imports have been adverse-London as being the best obtainable 1035 many very important and ex- of Railways took office in December has encouraged exports, and in every case been well received in counter-marchings. verine fright moments have definitely had year, will be productive of benefit ly affected, nevertheless the steadi- in the circumstances. A settlement

ent Lensive projects have been put under the best of it and, although there to both sides.

Iriess of exchange has to some extent of the Hukuans, the International

Railways has way. His ambition is to complete will almost certainly be bad patches

Your Board

(Continued on Page 9.) of Dircelors fully offset this disadvantage. I cannot been complicated by

the flotation, from time to time, yet we feel fairly

associate themselves with the to better than quote Sir Frederick nature of the

but on an confident that, in due course, as the

many public expressions of regret Leith-Ross' opinion of last June when nouncement may be expected in the stability and authority of the Chinese

at the transfer of Sir Andrew to he said:

future. A settlement of the Vickers- Government become consolidated,

Ceylon after so short a period as

Marconi debt has also been negotiated No Matter What The the outlook will still further improve.

#A!! things considered thereby another Committee the Governor of this Colony, Our

and at the loss is their gain: We feel surc

would appear to be every reason present moment it seems that that he will win the

so far as economic factors are con- Chinese Ioans floated in London. ex- confidence

cerned for confidence in the present cepting the Huluang, have been read- and esteem of Ceylon as quickly as he did of Hongkong.

currency scheme, provided that the justed" as satisfactorily 08 can be Chinese Government complete and expected. In the first few years the carry through efficiently the pro- resu

resultant

charges on the Ministries gramme of internal reforms in- of Finance and Railways are quite cluding especially the reorganisa-small, and this gives time for the tion of the Central Bank and the Government to complete their plans reform of the budget."

It is

has existed

In strug

has we trust cleared the air.

HONGKONG AND CANTON

REFORMS JUSTIFIED

has been a matter of const-he resources at the disp and live taken by the Governor of the of nine adjacent, provinces. Radio

have

und

particularly to China, where condi-imo dealt with the situation prevail with lined between 1/2.4. nly by the Ministers of Finance and Ralf who are thus less and less under the

tions have at any rate not been so depressingly tense as in Europe.

THE YEAR IN CHINA

It must not be forgotten, how Immense is the task of unifying and governing such a great country as China. It has often been pointed out that the proper comparison is between China and Europe rather then between China and a single country. This indicates that patience is needed and too much must not

be

expected.

yet

Relations with Japan have again

und

LOCAL CURRENCY

of

all

for the rehabilitation of the finance

RAILWAY CONSTRUCTION

་

of

Weather

railway

special

in-

RESPIROIDS

BONCHIAL TABLETS

Will Protect You Against Coughs, Sore Throat

i Many, a cough or cold can be arrest- ed in its carly- stages by the of Re- spiroids.

Al- ter the trouble has developed Respiroids

use

I will now turn to currency ques- year with exchange at 1/31%, rising tions. In Hongkong we started the

to 1/35%, where it remained until the

And Bronchial Troubles. middle of May. By the middle of

of the country, which we see no There was much more In Sir

These pleasant, aromatie lozenges, dominated the political scene,

reason to doubt can be done it poll-held in the mouth and allowed to September the rate declined to 1/2 Frederick's the outstanding feature of the year but recovered to 1/2% at the end of which still applies with great force, admirable statement

tical stability is assured.

dissolve slowly, crit antiseptic - is that

maintained the the year. China hap

yeur. .status quo. In

the referred to the necessity of

SMUGGLING EVIL

I vapours which, circulating through spite of dificult

After a full year's trial we may unification of the note issue, to the Improved returns, have been re-

the respiratory organs, dispel the periods she has shown that she is say that our new currency has work-dependence of the

germs before they have got a grip. more than ever determined to standeel nosi satisfactorily, with a mini-internal stability and to a settlement Revenue Administrations, while the currency on ported by the Salt and Internal her ground. In North China, at any rate outwardly, there is little change of fluctuations, which has been of the special situation in North increase of $9 millions in the Customs

great help to Merchants.

China which has been, and still Is, Revenue for 1936 came o to bo

consider seen. The Hopel-Charbar

As you all know, Chinn is no potential danger to the Political Counell remains under the

Customs able surprise in view of the smuggl- longer on u control of General Sung Che-yuan, standard. Her currency systein may

free silver currency Revenue.

ing in North China which was known and the autonomous regime of

East-

We understand that the Govern- to have seriously affected the collec- ern Hopel still exists under Yin Ju-ons fairly be termed a managed taent is taking in hand the essential ions in Tientsin and the Northern

foreign exchange standard, although Dar currency reserves are in fact net promote form which were in ports.

by Dr. H. H. Kung on The Customs authorities have on Negotiations, or at any rate, con- partly in foreign exchange, partly in November 3, 1935, and while pre- the whole successfully prevented the veraations, between the Chinese Foreign Office and the Japanese connection with silver is a precarious realised that governments have many southwards, but in the East Hopel gali and partly in silver, But the gress may seem to be slow, it is transportation of smuggled goods Ambassador, with a view to a funda-one, in spite of the declaration of the dificulties which are unknown to district there has been practically no mental readjustment of the relations Cinvernment on May 17 last that 25 botween

those outside the inner

will not be

the saturation of supplies has when been proceeding in an intermittent the note issue would be maintained long before some announcement will caused a temporary slow-down in the way, The Chinese attitude hus If in aliver.

be made of the action

taken.

| smugglers' activities. anything suffened up during the It is truc that ailver, dollars, Managed currencies are liable to be Whatever measures the Customs year, but there were occasions when of the old type, still circulate a serious danger to merchants and take can only be palliatives, and no compromiso seemed possible. How a medium of payment in some of bunkers if the "munagement is not real solution will be possible until ever, both sides were responsible for the more distant parts of China, and founded on a firm and solid baris, the political status of the East Hopel set-backs; there were unfortunate fair quantities are certainly board-such as is implied when there is an Autonomous arca Is settled by Incidents involving death or Injuryed, but it is probable that in time independent Central Reserve Bank diplomatic negotiations.

keng.

her

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