September 1, 1900.]
roughly $100,000 in new stock, and I consider we should be justified in putting the apprecia. tion against the depreciation, and this deprecia: tion being put against the appreciation would bring the thing up very much on the same level. The sum of $20,000 seems to me to be
excessive.
Mr. MORRIS-Mr. Chairman, I support this proposition of Mr. Veitch's. I should like to ask what you have done with the reclaimed ground. I understand that it has been sold at $20 a foot. You made some reference to it in your speech.
The CHAIEMAN-The reclamation in front of the Hotel has not been disposed of.
You are alluding to a smaller piece, the corner lot on Chater Road. That has been disposed of, but | it is a mers trifle of some 650 feet.
Mr. MORRIS-It is a mere trifle of $12,000 If we look upon these things as trifles we may say that in asking for an increase in the dividend we are but asking for a trifle.
The CHAIRMAN-That amount belongs to capital. This transaction relates to the current half-year. There being no further questions I propose the adoption of the report.
Mr. MORRIS-Don't you think that the pro- position by Mr. Veitch should be put?
The CHAIRMAN-It has not been put as a proposition.
CHINA OVERLAND TRADE REPORT:
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:
171
the old portion of the Hotel which will have to be | and Fixtures. If we had, as some Companies do, taken in hand before long, I think, considering deducted the actual cost of maintenance of these two points, that the cost of rebuilding two items from the profits before we closed the should be met partially if not wholly out of the half year's socounts, the balance of proft woulp. serve Fund, and for that purpose we should appear as $26.818 less than it does in the copy build up our Reserve in the days of prosperity of the accounts now in your hands. I do not The argument that because our land has appre- know if any of the gentlemen who signed the ciated in value, because the cost of building letter to the directors object to the setting has gone up, we should therefore pay a higher side of $10,000 against repairs and renewals. dividend, appears to me so monstrous, so unsound, If we are not allowed to do this the expendi. that I can hardly think it has been put forward ture on these items during the current half-year seriously. We have no surplus land, no bricks must come out of profits for the same period: and mortar that we can turn into cash. We There is nothing at the credit of the account cannot out chips off our land to sell when we at the moment. The account of repairs and need new carpets. Where then are we renewals provides for the upkeep of the build» to procura the cash to pay these increased ing. It is manifest that the expenditure on dividends? Are we to borrow from the keeping a building like the Hongkong Hotel Bank? I think, gentlemen, that if we were weather-tight and of sufficiently, attractive to ask the Bank for an overdraft to pay these appearance to meet its trade costs a considera), dividends-dividends which in my opinion we sum of money Certain of the company's have no right to pay-and were we to offer as holders appear to object to the reserve security for the overdraft the appreciated value being maintained to the extent which this of our land-I think. gentlemen, the Bank's directors propose. If the suggested appropria reply would be justified if it were more forcible tion of profits is carried out the sum at credit than polite. These, then, are my reasons and, of reserve fund will stand ̄st:$60,000.. I đó - before you pass this resolution, I beg of you not consider this at all a large fund for to ponder well what the effect will be. You company with a capital and debenture issue will be forcing the Board to pay away in divi- of 8825,000. The two largest and soundest dends-in spite of their mature judgment to business concerns in Hongkong are allowed the contrary-more than has been really earned by their proprietors to pay a much less pro and you will be creating a precedent, to follow portion of their gross profits in dividends, and which can only load to one result, and that is a to transfer to their reserve funds a much larger speedy return to the financial sembarrassments proportion of their profits than the Hongkong and difficulties which hardly seven years ago threa- Hotel Co. I refer to the Hongkong and tened to close our career in the Bankruptcy Whampoa Dock Co. and the Hongkong and Shanghai Bank. The former company in their Mr. PARFITT said-With reference to the let last half-yearly account showed a balance at cred- ter signed by certain shareholders representing ait of profit and loss account of $929,637 (say one- large number of shares in this Company, asking third of the profit made), wrote off: about the Directors to pay a larger dividend than they $241,000 and carried forward the balance of consider prudent on the ground that they (the $356,236 to the new account (that is to say, carried signatories to the letter) "do not deem it neces- forward more than the dividend and bonus sary for the company to set aside large sums of paid). The nett profits of the Hongkong money for reserve or depreciation," I would and Shanghai Bank on 30th June last like to point out to the gentlemen present how were nearly 34 millon dollars; they paid much has been spent on Furniture and Fixtures a dividend of $1,206,282, being only a tri- during the past three years and how much fle more than one-third of their profit, and will have been written off to partially put aside or carried forward most of the rest. meet that expenditure during the same I do not suppose that any of our shareholders period, provided the suggested putting aside really consider the Hongkong Hotel Co. a more 10 000.00 of $20,000 for the half-year of 30th June last be stable institution, or one the property of which 13,000 00 agreed to. I will read to you the figures: is less liable to wear out, than the Dock Co. and : 1,794.71 | Amount written off Cost of additions to the Hongkong and Shanghai Bank, and I hope··
from Furniture
repairs to Furni-
that they will regard it as but for their own in- $94,794 71
ture & Fixtures. Mr. CRUICKSHAN
terest to allow only moderate caution to be used ANK-I have pleasure in se-
$30,528.74
in providing for fair wear and tear and possible conding that amendment.
strokes of evil fortune which every business is liable to. I hope the gentlemen present can be induced to accept the dividend of $4 per share. suggested by the Board of Directors,
Mr. MORRIS-Mr. Veitch has put it as an amendment.
Mr. VEITCH-No, I had not, but I will put it as an amendment. I thought perhaps the Chairman would have said something about my remarks.
The CHAIRMAN-The report must be pro- posed first, Mr. Veitch.
Mr. VEITCH-Oh! thank you. The CHAIRMAN then proposed and Mr. MURRAY BAIN seconded the adoption of the report and accounts.
Mr. VEITCH then proposed the following as an amendment:-"To amend the report in the apportionment of credit balance as follows:-
To pay a dividend of 10 per cent. for the half-year, absorbing
To write off from value of Furniture
and Fixtures...
To set aside against Repairs and Renewals
To transfer to Reserve Fund To carry forward to New Account
$60,000.00
10,000.00
Court.
and Fixtures.
31 Dec. 1897. $10,000 30 June 1898. .10,000
31 Dec. 1898... 8,440 30 June 1899 ...15,000 31 Dec. 1899. ..15,000 30 June 1900 ..20,000
$78.440 equal to $26,146 per
annum.
1,761.13
14.287.29
20,239,99 38,214 74 26,818.79
$131.850.68 equal to $43,950
per annum.
No one else wishing to speak, the amendment was put to the meeting and carried, 22 voting for and 14 against.
give a leaner report.
On VEITCH,
Wilcox were re-elected directora.
On the motion of Mr. E ICH GEORG, seconded· · by Mr. Moxon, Messrs. W. H. Potts and W. H. Gaskell were re-elected anditors.
#.
The CHAIRMAN—Well, gentlemen, I declare the amendment carried. Yours is the respon- These figures (which all appear in the pub-sibility if on any future occasion we have to lished reports) show conclusively that the sum of 852, 410.68 has, during three years, been spent of 852, 410.68 has, during three years, been spent the motion of Mr. W. From toonded. by amount which will have been put aside to meet that absolutely necessary expenditure. At first sight, 1 think it would appeal to any im- partial observer that, instead of too much hav- ing been written off for depreciation, a danger- only inadequate sum had been reserved for that purpose, but I do not think there is any reason to go so far as to fear that, as for several years prior to the year 1896 the Hotel was absolutely starved for lack of funds to keep the furniture and fixtures in an efficient state, but by the big expenditure of money detailed above the effect of the years of starvation has been obliterated. Nevertheless, to keep the establishment in pro- per going order, it is, in my opinion, absolutely necessary to spend at the least $30,000 per annum on the two items of Furniture and Fix-leagues." tures, and it is obvious that the money cannot be spent if it is not pat aside out of the profits. The account known as Fixtures covers expendi-
Mr. OSBORNE said-It is customary at Share- holders Meetings for the Directors of a Com- pany to voice their opinions through the Chair. man of the Board, but the question before the meeting is, I think, of sufficient importance to justify a departure from this rule Speaking for myself then I desire to place on record that I am entirely averse to the proposed increase of dividend, and I think I should be untrue to my trust were I to allow the proposal to pass without entering a most emphatic pro- test against what I believe to be a course that will act injuriously upon the permanent wel fare of the Hotel Company. My reasons, gen tlemen, are two. In the first place, I do not consider the earnings justify a higher dividend, because the appropriation of profits as suggested by the Report errs, if it errs at all, in not writing off enough from Furniture and Fixtures. Since 1895 we have spent in this direction $134,855 and during the same period have written off $885,040; this in my opinion is, if anything, inadequate, because a large proportion of the expenditure was upon carpets, cutlery, crockery, glassware and linen, on which the wear and tear is so great that I think it would be more correct to pay for such articles out of earnings and take no credit in the accounts for their existence. The outlay on Furniture and Fixtures will always constitute a very large item in our expenditure and necessarily so, be- cause if you starve the business of its legitimate nourishment in the shape of up-to-date furnish-ture on machinery and boilers in connection ing you will be starving the gose that lays the golden eggs. A well-appointed comfortable Hotel will thrive, but a mean, badly appointed one, such as we were a few years ago, will repel custom rather than attract it. As to my second reason, considering that only $8,000 has been written off the value of our building and in view of the reconstruction of
...
with the two hydraulic lifts, the distribution of hot and cold water throughout the building, the refrigerator and fire extinguishers, the laundry, do., &o. Shareholders ought to bear in mind, when considering this question of dividend, that al- though the profit and loss socount shows a profit of $94,794.71, nothing has yet been deducted from the half-year's profits for upkeep of Furniture
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The CHAIRMAN-Dividend warrants will be ready on Thursday next. They are not yet made out.-We know that there- was likely to be some opposition, and there- fore we did not make them out. That is all the business before the meeting. I have to thank you for your att ›ndance,
On the motion of Mr. VEITCH, a vote of thanks was accorded the Chairman and his co- directors.
The CHAIRMAN-Gentlemen, I have to thank you for your vote on behalf of myself and col
The Glengyle, freightship, is bringing to Hongkong four 40ft. steam pinnaces armed with 12-pounder q.f. guns for river work in China, several field mountings for naval guns, and large quantities of spare gun gear:
The Directors of the Welcome Mining Company, Limited, have received the following telegram from the Mines:-White Reef, at the bottom of the shaft, have struck very rich ore and expect it to continue; samples from this assayed 7 ozs. 1' dwts per ton.
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