1938-02-26 — Page 23

•

THE

HONGKONG

'TELEGRAPH. SATURDAY,

FEBRUARY 26, 1938.

3

Bright Spring

for Little Folk

Wear

HONGKONG & SHANGHAI BANKING CORPORATION ANNUAL MEETING

POLITICAL SCENE DOMINATED BY DURATION OF SINO-JAPANESE WAR

Greatest Importance

That Peace Should Not Be Delayed

Knatchbull-Hugessen ot his mis- fortune in being seriously wounded when travelling from Nanking to Shanghal on official duty.

CHINA'S FINANCES

At a time like the present for obvious reasons it is impossible r those oulside Government circles to make any reliable statement of the currency and Danncial position of Chins, or for that matter of Japan.

Warlime conditions prevall and the dislocations which they mean.

THE POLITICAL BAROMETER is still too low to must be faced with exeulization of

warrant a forecast of fine weather for merchants in However, due credit must be given

Lasting Prosperity

Cannot Come to H.K. Without China's Aid

The difficulties of the Shanghai problem are immense,

a satisfactory

LIGHT WEIGHT TWEED COATS

For Agos. 1-5

the near future. Perhaps, said Mr. Miskin in his speech to those who have directed China's but they deserve the close attention of the Powers whose THE TOTS WILL LOVE THEM. ATTRACTIVE STYLES & COLOURS

during the responsibility it is to obtain at any rate foreign exchange market at the Annual Meeting of the Hongkong and Shanghai year. Stability has been maintain modus vivendi if an agreement on a permanent basis can- and in fact during the early part of Anancial experiments were off, the new currency

Banking Corporation, the catastrophe is perhaps magnified in the eyes of many.

"We shall have to wait a time for a real recovery, but the recuperative powers of both Japan and China are great and will, in due course, be sure," Mr. Miskin said.

the year, as threats of unorthodox not be found just yet.

ere warded

. gained in Hongkong has been fortunate in that the misfortunes strength and merchants showed In- of China have not so far had any ill-effects on the Colony. creasing confidence.

It is, however, certain that for real and lasting prosperity There was, of course, valuable co- speration on the part of foreign banks. the Colony must rely upon normal and sound trading con- of factors ditions in China, and the present struggle is therefore be "It is, however, of the greatest importance that peace Moreover, on reasonable terms should not be long delayed. Other-assisted towards must commodity ing watched with much anxiety.-Mr. G. Miskin, address.

balance of payments: wise the dislocations will be less easily repaired; there will prices were still rising; there had ing Shareholders of the Hongkong and Shanghai Banking been two years of bumper crops; be the danger of other countries becoming involved, while internal conditions were quieter than Corporation this morning. both combatants may be driven into desperate expedients for some time; the opening-up of which will deadlock all trade."

1

A number

the

the Sino-Japanese condict Justification for its continuance in an

unimpaired form. commenced.

If and when the Powers are pre- upor pared to negotiate and· agree some new regime for Shanghai, then of course the situation will be altered, but in the meantime it seems to me and to your Directors that, as a result of the recent events at Shanghai, we have sufficient cause to call for strengthening rather than a weaken- Ing of the present Municipal Council Administration. There should, more- over, be guarantees which will ensure regard to its boundaries. the strict observance of neutrality in

country was increasing the circula- tion of banknotes; arrangements for when the formation on sound and modern lines of a Central Reserve Bank were

BUOYANT CUSTOMS REVENUE (Continued from Page 1)

though we were aware that the cloud well advanced, and a fresh attempt of Sino-Japanese distrust silil hovered et budget control had been initiated.

The Chinese Customs Revenue in Other changes in the Balance Sheet in an Ill-omened way on the horizon.

Such was the situation when in 1837 amounted to no less than $342 have not been very sturtling: Bills it is doubtful if this cloud could have Payable are up about $6 million, been dissipated even with the best July the first signs of u serious con- millions, an increase of $18 million Biet were seen. In August, when the over 1930, thanks to the excellent Current Accounts up $51 million, wit in the world. while Fixed Deposits are, down $29

fighting broke out at Shanghai and start given in the first 7 months of million.

An accumulation of aggravations bomby fell in the business centre of the year.

was necessary to You are aware that negotiations On the other side Cash with Certi-made it almost inevitable that the Settlement, it ficates of Indebtedness is up $61 storm would have to take place be- take steps to prevent a panic, so are proceeding in regard to the Cus- million, Securities up $23 mition, fore the air could be cleared. But restrictions were placed on the with- toms tariff and administration in the by the Japanese Bills Receivable up $46 million, do not propose to detain you with drawals of deposits in the Chinese areas controlled while Loans are down $20 million. any comments about the causes and banks. These measures were supple-

to emphasize how important it is that Your Directors are very glad to be origins of the war (let us be frankmented by what is known as the Welforces. It is hardly necessary for me

The difficulties of this Shanghai able to present to you to-day such and call it war cutright). Our Bank Wah or blocked currency system, the Customs Administration should

problem are immense, but they a sound Balance Sheet and a wel is in a delicate position because of its which permitted the constituents of remain as now constituted, and con-

funds come Profit and Loss Account at interests in all parts of the Fur East, the Chinese Banks to transfer

trolling Customs affairs throughout Powers whose responsibility it is to such a time. All known and likely and at critical times ke these the from one blocked account to another Unue to be the sole instrument con- deserve the close attention of losses have been amply provided for. uld proverb "least said soonest by means of Wel-Wah cheques or the whole country.

obtain at any rate a satisfactory and in addition a moderate sum has mended" proves its aptness.

in This proved effective The orders

The present administrative system modus vivendi if an agreement on a been allocated for any possible losses easy and rapid transmission of news preventing any large-scale panic

political upheavals | permanent basis cannot be found just which may come to light later on. from one end of the world to the fight from the currency though has weathered

and civil strife over many years and yet, other is sometimes a mixed blessing. was subjected to pressure for some

HONGKONG INDUSTRIES the maintenance of its existing status Too many spokesmen are in fact time. Gradually the demand for and credit is unquestionably to the And now to turn away from quite as bad as too many cooks.

foreign currencies declined uppre advantage of boil: China and Japan, China: ciably and at the end of the year the in order that in due course the re- problem was no longer so scrluus.

financing and rehabilitation of the country may proceed smoothly.

CONDITIONS IN FAR EAST Conditions in the Fur Bast org to- day more serious than they have ever been in the history of our Bank.

the

Here in Hongkong we have been fortunate in that the misfortunes of China have not so far had any i- I am glad to say that repeated as-

In fact, many surances have been given by the effects on the Colony. be respected, Japanese that the foreign loans will of our local industries have made antisfactory progress during the year, It is, however, certain that for real Sir Frederick Maze is in a dimcult and lasting prosperity the Colony position. He is an official of the Chi-must rely upon normal and sound nese Government, but as Custodian trading conditions in China and the earmarked for the present struggle is therefore being

of the revenue

watching each other Intently, tel change, both internal and external, for the ear-marking-orgenthau service of important foreign loans he watched with much anxiety.

gold against has certain responsibilities which are

con-

FAR EASTERN TRADE The two great nailons of the Let us turn from politics to trade.

SHIPMENTS OF SILVER all know how promising the Orient are at grips, grimly deter- You

China's interest in silver remains mined to fight it out. All the efforts situation was during the first half of

fund in gold or made in recent years to outlaw war the year. Prices were rising, the im-dependent on its conversion into a through treaties, pacts and coven-provement communications by currency reserve ants have broken down.

rall, rond and air was opening up the foreign exchange. Thus, during the So far from intervening to bring country more and more, the standard year, large amounts of silver were this conflict to an end, the leading of living was improving owing to shipped from Hongkong to foreign Western countries are seen aligned good crop conditions in Ute interior countries on account of China. Last into groups supporting widely as well as the greater demand for summer Dr. H. H. Kung made on opposed theories of Government; export produce: furthermore ex-arrangement with Mr.

In Japan, foreign_trade hus was supple of on International--nature--Bond- boxers at the opening of their bout. had never in our time remained for Chinese silver. This

Under auch conditions British In so long a period with such small mentary to the agreement of May holders of all countries look to him tinued to increase in volue. The

We 1930 under which the United States to steer a course between strongly excess of imports was at one time un-

usually high, but the imposition teresis in the Far East might well variations. be pletured in the cycs

of His

Proof of this satisfactory state of Treasury had already arranged to conflicting currents. Majesty's

regular only a

and substantial fident that with his customary taet stricter Import controls affected purchase small item in the sum total of the affairs can be seen in the Chinese uncunts of silver from China and to and political sagacity he is doing his reduction, and the year ended, accord- adverse balance somewhat over Yen At the end of July provide facilities in United States utmost to preserve the integrity of ing to the published returns, with the vast interests of the British Com- Customs returns. monwealth of Nations. Neverthe- exports had increased 45 per cent. dollar exchange for currency stabili- this important administration.

an international trustee he deserves 600 millions. The war han, of course, less, the indications re that the and imports 36 per cent. as compared sation purposes.

international support. The foreign brought in Its train abnormal cond!- 1030. Later Importance of the Far Eastern ques-with the same period in

No official figures are available to powers have in the past brought their Lions in trade and finance and the tion is fully realised, and very wel- Imports and exports of course fell off. come was the statement issued last the former more than the latter, but show what funds in gold or foreign influence to bear under similar cir-future must be largely dependent on

and while abnormal stand, doing so now, particularly as August, at a critical time in Shang- it is remarkable that at the end of exchange are held by the Chinese cumstances and they are, we under-the outcome of events in China.

Government; hat, which formally promised "all the year the import and export figures conditions prevail we can hardly ex- the retention of the "Open Door" in possible measures to protect British together yet showed an increase of pect progress to be made in the pub-China depends a good deal on the

per cent. overlication of reliable statistics. Ilves and interests" at that pori. We approximately nine feel confident that when necessary 1930. and in face of every diMculty we ean count on support for our legiik~ mate interests.

Government as

CATASTROPHE MAGNIFIED?

In

FOREIGN DEBTS

are con-

AB

"OPEN DOOR" CLOSED

of

烈

In Manchukuo the expansion of continued existence of an inter- trade figures has continued and there nationalised Customs Administration are indications that the opening-up such as exists at the present time. of communications, coupled with several years of normal trade, is At the beginning of 1037 the Chi-

SALT REVENUE

increasing the purchasing power of The political barometer is still too nese Government was still negotiat- Few years have seca such con-

of certain

The Salt Revenue in 1937 is report- the people. State monopolics and trasis as the past year in China and low to warrant a forecast of fine ing for a readjustment

been very much the supervision or control of Industries It is a and task to set about review-weather for merchants in the near foreign debts in arrears. In April to have

Central China the the London Bondholders' Committer,

to and exchange are, however, making difficult for ing the political situation there dur- future.

ques-

Increasingly but things ing 1937. The year started so well channels of foreign trade are now constituted to deal with Buch

foreign merchants and the "Open affected as never before since the tions, recommended the acceptance and ended so differently.

the Yet, of terms for a settlement of

the Salt Administration has Door" is now almost a thing of the opening of the treaty poris. may I be so boid as to suggest, that Hakuang Railways Loan similar to unfortunately falied to maintain its past.

Salt for this very reason the catastrophe those already adopted in readjust-control over the North China In each of the past few years your is perhaps magnified in the eyes of ment of the Tientsin Raliway Loans. Brens. Chairmea have uttered words of

Two United States doilar loans were

This Administration han been warning about the dangers inherent many

If, as seems likely, the Yangtszej also put on a new basis, namely the tions between Japan and China.

RELATIONS WITH JAPAN

13

same

increased further

1930

owing taxation,

com-

In the coming year the question of extraterritoriality will have to be

terests in the country, alongside the favoured Customs, and World trade conditiona, and In the unsatisfactory politieni rela-Valley continues to suffer throughout | Chicago Bank Loan and the Paciot in the situation of an ugly duckling faced by the foreign powers with in- Last year your Chairman stated the spring and summer, the effect on Development Corporation Loan, both it has therefore been rather neglected; especially conditions in the United

al powers. Nevertheless, it is im- that relations with Japan dominated trade in general will naturally be dating from 1910. Furthermore, the the politient scene. He mentioned serious, but there will be adjustments. good work of settling up certain long by foster parents, the internation- States, affect in a varying degree that negotiations between the two A loss here will become a gain there, outstanding advances and material portant that the Customs and Salt trade in all the countries of the East. departments should be treated on an equivalent Thus fairly optimistic reports from countries were, when he spoke, in and I do not think it necessary to debis to Government

proceeded satisfactorily.

bacia, as the arguments used in the India are qualified by doubts as to suspense as result of the Slan Inci- be too despondent,

We shall have to walt a time for a dent when General Chiang Kai-shek

The conclusion of agreements re- ono case apply also in the other. The the state of world trade throughout garding the Chinese Government outstanding foreign loans secured on the coming year.

(Continued on Page 5.) was kidnapped. That affair, it now real recovery, but the recuperative appears, was a key-point in, Sino- powers of both Japan and China ere loans in default and the improved the Salt Revenues require a Japanese relations. The result was great, and will, in due course, be outlook in China to which I have al-paratively modest annual remittance of funds and the revenues collected Even now we see how China's ready referred, had a favourable an accession of strength to those are. Chinese who, rightly or wrongly, misfortunes are leading to develop effect on Chinese bonds quoted on the should continue to be ample for these saw no hope of co-operation with ments in Western provinces which London Stock Exchange and it was requirements.

been un-thought, early in the year, that, It It is satisfactory to be able to note Japan and advocated a polley of might otherwise have

attempted for decades.

might shortly be possible to bridge that, in spile of the war, the National stern resistance to aggression.

The subsequent meeting of the 3rd It is, however, of the greatest im-the hiatus in the Londoni fasuer of Government has continued regularly Plenary Session of the Central Exe-portance that peace on reasonable Chinese loana which had existed, to pay the foreign loan obligations of secured on the Customa, Salt and cutive Committee last February con- terms should not be long delayed, since the Reorganisation Loon firmed that line of action, which had Otherwise the dislocations will be 1013. The Minister of Railways first Railways.

regarding the

STATUS OF SHANGHAI already been made one of the main less easily repaired; there will be initiated discussions planis in the policy of the Kwangs the danger of other countries be possible flotation of loans for new

Before I pass on to deal with ollier coming leaders and of the Communists. From that time on it seems that the in-batante ved, while both com-railway construction in China.

Subsequently, when Dr. Kung was countries in which we operate, you may be driven into desperate

to say something of those who

expedients which will deadlock all in London for the Coronation cere will expect me quence

wished for compromise

monies, negotiations for the building about Shanghai since its status is and delay gradually trade.

railway from Canion Meantime we extend our deepest of

ncross likely to be a prominent subject once understanding WAS waned. An reached with the Communist army sympathy to the sufferers in the war Kwangtung to Melhsien made pro- again in coming months.

This is a matter which in of very and the way was prepared for action areas, where the conditions have not gress. At the same time Dr. Kung by a united China as soon as the been paralleled since the Taiping also broached the subject of a john great Importance to all foreign bus!-

Rebellion of some 30 years ago. Dis to be used partly to provide addi-ness interests in Shanghai. need should arise.

We have seen the neutrality of a You will remember that early in tress is also great in the forelim com- tional assistance in the stabilisation the year the liberal and friendly tone munities. The Lord Mayor's Mansion of the Chineso currency and partly part of the international Settlement of the utterances of General Hayashi, House Fund gave help at a most for the refunding of a portion of the violated during the recent fighting. have been then the Japanese Prime Minister, cpportune moment, but further help domealle debt. We were consulted This would probably had taken and of Mr. Bate, his Foreign Minis-is needed and the International Red about this matter but no agreement avoided if intervention

were, and are, place in the early stages and thereby. ter, caused a feeling of optimism in Cross organisations at Shanghal and was reached. We regard to the development of rela- Lankow also deserve liberal support. bound by the agreement of 1020 be much loss of life and property might

tween the International Consortium have been saved. tions between the two countries, In I should further like to express of Group of banks, so we naturally

The valtio of Lfe existing Settlement China itaoif there were signs of word of sympathy to the relations of atability and progress such as had the members of Und British forces nought the views of the other groups regime cannot be questoned: one has not been apparent for many years, who lost their lives while serving at or course had to be left in abeyance there been no Bettlement at all to get

In regard to both these projects. They only to visualize the plantion has BEAUTY CHOPI The cutlook was, in fact, hopeful shanghai, and to Bir Hughe

The EMPRESS

INDIVIDUAL WAVE

EXPERT OPERATORS

1st Floor Exchange Bldg. Phone JSON.

Marie's

from $7.95 each COAT & HAT SETS Smart and neat combination sets in bright colours from $12.50 set BREECHETTE SETS Ever popular with youngsters. In white, sky, beige and pink. from $10.95 set FROCK & KNICKERS SETS In most attractive colours. from $6.75 sot

NEW CHUBBY SOCKS In Ivory, Sky, Pink, Lemon and White,

from $1.00 pair. INFANTS' KID SHOES In Sky. Pink or Ivory. from $1.50 pair

Children's Dept.

Whiteaway, Laidlaw & Co., Ltd.

Ssorgs

Old

"King Georgs IV Whisky

has had a REPUTATION for 50 years

Every QUALIFICATION of a first-class whisky and a DESTINATION that is always assured

THE

HONGKONG

PENINSULA HOTEL;

HONGKONG HOTEL; REPULSE BAY HOTEL:

SHANGHAI

ASTOR HOUSE: PALACE HOTEL:

HOTELS

LIMITED.

In association with the Grand Hafal des Wagona Lita. Peking

22 19