December 22, 1900:]
· CHINA OVERLAND TRADE REPORT.
ing Committee." But you did not state how the remuneration was to be increased, or 'state that it was to be increased, and no reasons were given to the meeting for the increase in the re- muneration. I do not say at all that the remu- neration should not be increased, but I think that some reason should have been given at the first meeting for increasing the remuneration. I find reference to the new Articles on the table now that the remuneration is to be increasd in this way. At present the general managers have a salary of $3,600, per annum. Under the now regulations they ar to receive $7,200, and also a commission of 5 per cent. of the not profits in any year in which the net profits amount to 7 per cent. on the capital of the Company, Now I am unable to say from the last report and balance sheet what the remuneration of the general managers was in 1899. Of course, un- der a deed of settlement, under the present re- gulations, they wore entitled to receive $3,600, but it is not stated in the accounts and it does not appear from the accounts what is the actual remuneration of the general managers - whether they got any commis- sion or whether they wore paid office fees or anything of that sort. No details of the profit they made out of the Company are given at all. But supposing the shareholders are of opinion that the remuneration should be increased, 5 per cent. on the net profits should not, I submit, be given unless there is some limit upon it. I see it is the practice in England for the Stock Exchange to stipulate for this, because there is a temptation to general managers to inflate, on paper at any rate, the net profits of the Company, in order to get larger remune- ration than they would get otherwise. But supposing, for instance, that the net profits of the Company amount to 7 per cent. on the capital, that would amount, in all, to 842,000 I believe the capital is $600,000, so that if the general managers get 5 per cent. they will get a commission of $2,100 altogether. Including $7,200 of salary they would get $9,300 under the new regulations, and there would be left about $39,000 as the net profits to be applied in payment of dividend and in other ways, i.e., it is possible, putting the profits at 7 per cent. only, that the general managers might be getting a remuneration to the extent of $9,300 under the now regulations, and the shareholders would get a dividend of only 6 per cent. It seems to me that if the general managers are to be paid by com- mission, it will be much more satisfactory that the commission should be paid not on the net profits but on the dividend declared, and that the general managers should not have any com- mission or percentage unless a dividend of 10 per cont. were paid to the shareholders. As lo the qualification shares, I think the Chairman misunderstood me; I havo always been of opinion that the directors of a company should have a large interest in it; the larger number of shares they hold the better for the interests of the company.
As to the change in the working of the London Agency and the payment of 24 per cent. commission on goods ordered, I may say that the now gulations wore only lent to me for a short time by the Secretary of this Company, and that I returned them after perusal and making a few short notes. It escaped my memory that Messrs. J. D. Humphreys and Son, in London, bore certain expenses. I had no intention of making any misrepresentation in this respect. As to payment of the Consulting Committee, that is a matter also forthe consideration of the
re-
=
Mr. Reeco another draft, which bore the title
'Articles of Association."
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503
ing. Mr. Reece's letter in the paper first called my attention to the matter.
Mr. REECE (resuming)-I see that the other draft is called Articles of Association.' I beg your pardon. The one sent me was entitled Memorandum,' but as a matter of fact the new regulations are the old deed of settlement with some alterations, and it seems to me it would | have been more convenient to proceed under the Companies Ordinance of 1890 and to get clean Articles of Association. It would have been more convenient and saved complications, but I do not want to raise legal matters just now. It would have been better if the shareholders had had these explanations given at the first meeting; I think that even now an adjourn. ment ought to be given to give the shareholders time to consider what the Chairman has said, and whether the explanations of the Chairman are satisfactory. It is usual when it is propos- ed to increase the remuneration of directors, or where Articles of Association are amended, to furnish information that what is proposed to be done is prima facie in the interest of the general management, and then the shareholders can make up their minds and say whether the pro- posals are fair or reasonable. I do think it would have been better in this case if the explanations had been given at the first meeting, and for this reason vote against the proposed alterations.
The CHAIRMAN-We have listened with in-appointing to the Consulting Committee P terest to what Mr. Reece has had to say, but, in my opinion, it would have been better if he had attended at the first meeting and asked his questions there. I must remind him that until we know what points shareholders wish explained to them we cannot very well go into detail. If we knew the shareholders required certain points explained we should be only too happy to explain, and if Mr. Recce had come to the office and asked the Secretary or myself, or any of us, we should have given him the explanation. Instead of that he writes to the newspapers. Only one day before the last mosting ho sent us a letter, and only two days before this meeting sout us another. It was quite possible for him. I suppose, to come to the meeting and get all the information he required, and it is possible he has taken the line he has taken. for every other shareholder to do so. regret
The CHAIRMAN-I am sorry, Mr. Harrison, I do not quite agree with your suggestion, that we should send a copy of the new resolution and the old resolution and report and last statement of accounts to every shareholder. The shareholders receive statements of ao- counts at each general meeting, and any onc who wishes to read the Artioles can read thun. Our shareholders are all over the world, we may say. It is altogether against the custom in Hongkong, and I do not see why we should go out of the usual custom, If anyone has any further remarks to make
Mr. ARNOLD-Do I understand thò election
of a Consulting Committee rests entirely with the General Managers or with the shareholders? The CHAIRMAN-With the General Mana- gers and confirmation by the shareholders,
Mr. ARNOLD-Suppose the shareholders do not confirm the election of the Committee, is it left for them to elect somebody else P
The CHAIRMAN-As a rule, General Mana- gers elect the Consulting Committee.
Mr. ARNOLD-The election of a Consulting Committe is left entirely in the hands of the General Managers?
names. I must
Mr. ARNOLD-Would it not have been bot- ter to have the alterations printed and sent round to the shareholders? When it is proposed
to alter Articles of Association, it is usual to send round copies of the old articles with the alterations proposed.
The CHAIRMAN-I think we followed the
nsual custom.
Mr. ARNOLD-I think not. I think every shareholder should have known what it was proposed to alter. It would be more satisfactory to sond these things round to the shareholders, as is done by other companies, and thus give the shareholders every opportunity of studying them.
The CHAIRMAN My opinion is that it shoul be treated as a purely business matter. It is advertised, and the shareholders should come and ask the information or attend the
meeting and ask any questions from the Chair-
Ian.
Mr. ARNOLD-Shareholders will not take that trouble. They are not able, just by looking at the thing on the counter, to study it carefully.
The CHAIRMAN-You make a mistake
great number of the shareholders do come in and ask questions.
Mr. ARNOLD-Every shareholder will not take the trouble. I think it would be better to bring the alterations to the notice of every shareholder. It is not much troublə. Print ing is cheap, and paper is cheap; and it might have been sent round. The shareholders ought to have an opportunity of seeing the proposed alterations.
shareholders. I notice that they are to have $2,500 per year as remuneration in any year in which the net profits amount to 7 per cent. of the capital. It seems to me that as there are only four to be paid that is an awkward sum to divide among four; $2,000 would be better. Generally speaking, I shall still have to vote against the confirmation of the resolution, or if necessary I should move an amendment that it be not confirmed, and I must do so for reasons expressed in my letter. I am still of opinion Mr. HARRISON-I would suggest that we that the wrong course was adopted by the should have a copy of the articles it is proposed General Managers; it would have been more to alter, and also a copy of the last balance convenient to alter the consti.ution of the com- sheet, and that we might have them for a pany by substituting a memorandum and arti- fortnight to consider them; and this meet cles of association for the deed of settlement. |ing might bo postponed till we know I see it is intitled a memorandum and articles exactly what we are called upon to vote on.
of
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The CHAIRMAN-We put forward their
Mr. REECE-May I ask whom you proposa The CHAIRMAN-I don't think your question comes within the business of this meeting.
Mr. REECE-I put the question because it seeins to me that it is very pertinent to these proposed regulations.
The CHAIRMAN-There may be some little doubt about some accepting, and I do not wish to put forward the gentlemen mentioned their names unless they definitely decide to act.
be comprised of a member of the firm of A. S. Mr. HARRISON-Can you say whether it will
Watson and Co.-J. D. Humphreys, I mean?
the Articles of A. S. Watson and Co., Ltd., The CHAIRMAN-We are now considering and naturally the Consulting Committee would belong to A. S. Watson and Co., Ltd.
Mr. HUMPHREYS-He wants to know whe- ther there is anyone outside the Company's staff ?
The CHAIRMAN-Yes, outside.
The CHAIRMAN then put the resolution, as follows:-That the Regulations approved by this meeting and for the purposes of identifica. tion subscribed by the General Managers be such Regulations be and they are hereby adopt- and the same are hereby approved. And that
exclusion of all existing Regulations thereof." ed as the Regulations of the Company, to the
Mr. REECE. Before you put that resolution, I move the adjournment of the meeting to enable the shareholders to consider the matter.
Mr. HARRISON seconded.
The amendment was put to the meeting and
lost.
Mr. JOSEPH then seconded the resolution, which was carried.
The CHAIRMAN-That, I think, is all the business of the meeting, gentlemen. Thank you for your attendance.
The meeting then terminated.
Our Shanghai morning contemporary quotes a letter from Tientsin, in which the writer says: We are very angry with the Russiang for claiming the whole of the eastern bank of the Paiho, opposite to us, as their settlement by right of war, 'Russian blood having been spilt on the soil. As the value of this land is entire
ly due to the fact that our people have made it so, and as if the Russians take it, they may pro- coed to make jetties and so block the river fair. way altogether, we are keenly interested in bluff. ing them off. Nine-tenths of all our revenue comes from our band fees and mooring fees; still worse, the railway from Tangku passes through the ground they now claim, and in the event of the river becoming unnavigable the fortune or failure of the three concessions, British, French, and German, will be in the hollow of the Russiau hand, for it will be in their power if they are
Association, but that is misleading, because had no time to come to the office, and as I allowed to take this concession to block on na,
old deed of settlement.-
thought it would be some technical matter, I At this point Mr. Henry Humphroys showed 'did not take the trouble of coming to the meet-
the Germans, and the French from future rail- way communication with Tangku.
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