August 25, 1902.1
capabilities were brought home to us by our inability to secure the docking of H.M.8. Victorious in the year 1998, you will have learned from the report that the negotiations with the Government for a site for the dock, which have been going on for more thin; three yes, hare now reached a print where яв cin ›ubmit 10 You definite toms for the acquisition of the land, and this will be done at a subsequent pecial meeting to be held in the latter pait of Cctober next and prior to which a general outline of the scheme and cur piercsals will be ciren- lated among
shareholders in ample time for their consideration. 11 was, as you know. intended to discuss the question after the elcse of the present meeting, the reason being that the Goverment gave na only up to the 15th proximo to decide on the acceptance or otherwise of their offer, lut as some shareholders wished for lenger notice, we altered cur intention in deference to their views, and sirce that time the Government have in response to a request from us been good enough to extend the time for a further period of three months. Looking at the accounts I see nothing but the usual items. which speak for themselves, though I may remark that your indeltedness to sundiy creditors, which was $633,892 last December. Las increased to $1,033,259 on 30th June, with another $300,000 to Le added when the pres at dividend is paid, and will contiLue | to increase as long as we do not put by end of earnings every six months at leist as much as we bave spent cn capital in the interval. Cur credit is good, no doubt, but we must not let | that fact tempt us to stretch it too far till we get quite cut of cur depth, and be forced to suddenly call on yen for more capital. My speech is possibly longer than usual, but my desire is to place or position clearly and fully before you. Before moving the adoption of the report and accounts I will be glad to answer, so far as I am able, any questions concerning
same.
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CHINA OVERLAND TRADE REPORT.
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Mr. J. R. MICHAEL-I rise to propose an amendment to the motion for the idiption of the report and 1 ccounts as printed just put to the meeting by the Chairman. My amendment is to the effect that the amount proposed to be with off the value of the Deck establishment. &c., riz. $219, 37.76, te reduced to $169,437.76 and that the difference of $50,000. Le approj ri- fated for an addition to the bonus at the rate of $1
for share.
Iu formally moving the amend ment I beg leave to make a few remarks. Half- year after half-year we have met to listen to the accounts of geed stewardship of cur vest and in,portent establishments with their great TEFUMICES. On those occasions we have Teen neither stiuted with cur praise of the directorate and management Lor parsimonious with cur Lounses. Just as reward is literally given for the successful conduct of cur business, so also must criticism - fir and impartial criticism be expected when gccd cause is found for grievance in the part of the shave Lolders. As one anier gst a laige Lumber of shareholders I desire to ventilate cur grievance, and I take this public cccasion to make it heard. The past half year has been anything but a prosperous one for the Company, with the inevitable result that there has been au abnormal shrinkage in the net profits of our business. When good judgment 1d foresight cannot le taken to task for small profits we must accept in an equable spirit the ups and downs from which human affairs
But when
profits,
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and consideration it deserves. I do not propose, | of materials on hand, and the rest of it therefore, to enter into any discussion of this have been written down to a figure which at Leyond venturing to remark that times and cir- their back-value should afford na a sense of rmstances have changed a good deal, ard with perfect security. Yet the proposition before us Lis perhaps the opinions of many shareholders does not seem to confirm us in that security; have done likewiɛe, and, judging from what one we might have been for all we know living las heard, the project is if a highly debatable unconsciously in a state of false security after I Fure that shareholders all. This inconsistency of action in proposing gire the closest consideration. 10 to write off variable i mounts which has the whatever st: fements the I card may place effect of infusing a want of confidence is not before us concerning this matter.
Lusiness like nd appeals to men of common. not clore my remarks without touchi:g on
as worthy of strong condemnation. you late made to the the reference
Shareholders suffer in smaller dividends by this sed eitenmstances surrounding the death
stionable methed in the adjustment of our of cur late chief manager. Mr. Gillies: accounts. Throughout the East the Hongkong fcel sure that all shareholders." as well ́rs his L'ocks have been regarded as by far the many friends cut Lere, must deeply gret his sonndest and the most stable concern wherein end, and the suddenress of it. (Applame.) capital might be safely invested. One of the reasons advanced for the sub-division of our shares, I well remember, wrs to enable small people to invest their savings in our gilt. edged securities. Dividends and bonuses were all declared which investors, trustees, and alike had relied upon as likely to have been Yet we are confronted with maintained. a state of affairs reflecting Lot very creditably upon there who have proclaimed to the world that Deek :lares could emmind an interest that extianecus influences would not severely At one fell stroke we sce cur dividends affect
cent. per and bonus cut down by as much as 33
a serious blow to thee who might have depended upon the stability and the power of Company to keep up a retain when oure declared and paid. It is not the clamour of speculators 1 give utterance to; I bave no sympathy with such. But if buyers and
of shares are
with taxed
this in order to ward off any just misnomer
the
‹ f pait
shore- representation holders, I must admit that members of the directorate of local companies themselves fall within the pale of their condemnation, and staud lefore the public as self-condemned in scrips leag their own names passing from hand to hand in the Colony. The circumscribed limits of our business circk disolcse many un- pleasent facts, which escape observation in large cities. Gentlemen, I appeal to cur Poard to leck up to the magnificent position which our unrivalled Bank-our very own, the Hongkong and Shanghai Bank-has created for itself ip the unshaken solidity it is in to-day by a course of aetion admitting of no wavering principles, True. its earliest history furnishes example not to be copied; but its atter-day manage- ment Las been such as to make it capable of weathering all financial cries, and co matter what their effects on the balance-sheet its ability to ay uniform steady dividend and bonuses has never been imperilled. As owners of a business, who pay for its piper conduct, sharebolders expect to be considered and to be taken in the confidence of the directorate. In Hongkong. they are often too lightly considered, and a desire to elicit in formation or to throw out a suggestion is not infrequently misconstrued into an antagonism against the directorate. This is destructive of the true interest and prosperity of any concern. Now, gentlemen, the con- fidence in cur Dock as a stable concern. It is an unpleasant tinth to is shaken.
There is no getting out of that admit.
Let us fict. We cannot be blind to it. rise up to the situation and make an honest error of judgment has confession that an evoked unlocked-for criticism not altogether unmerited. Tefore I resume my seat, I will make no apology for reiterating opinion to which I would appeal to the directorate to give their carnest consideration. Having regard to the fact that our establishments, our workshops, and cur plant are represented in our books at figures for which they could never be replaced, and are variously valued at six or seven times the book value; the time has now arrived when, in my opinion, a systematic method of writing down should be adopted once
all. When (nce
adopted, "let system be put in practice as a hard and fast rule, admitting of no departure. It is not fer me to say what the exact percentage of our profits should be taken as the "golden mean
ale
never
fice.
(bre
There were no questicus, and the CHAIRMAN moved the adoption of the report and accounts. Hon. C. S. SHARP said-I beg to second the resolution you have just proposed for the adoption of the report and accounts. I feel sure that all present have considered with attention the exhaustive miks nd explana-earned. can be distributed without impairing tions you have given regarding them. We the efficiency of the Company's work and its seem to have fallen upon lean times, and no futnie prespects, we naturally feel it a hardship dontt as we have in a measure leen spoilt of to see the profits proposed to le divided in a recent years by a necession of ever-improving manner by which only posterity will gain at the In the reconnis half-years' workings the present comes asiather cost of our own immediate less. an unpleasant reminder that there are "downs before us the directors propose the enormous as will as "us" in Lusires. I do not sce. si m of $219,437,76, or 583 per cent. in propor- however, why the present little set-back should tion to the net profit, which is cut of all cause any alarm, as business has admittedly proportion to the total profit, to be written off been in a very slack state all round for some the value of cur property, plant, &c., cut of a time past, and this Company caurot expect to total ret profit of 1373,460,68. It is not be exempt from the snits of this: Lut we apparent to us shareholders what rule applies should not therefore imagine that the with the directors in the matter of this sppor good times have gone, to retura no more. I ticament of profits. On the face of it and in em glad to see that the Board proposes a the absence of satisfactory explanation, the conservative policy in regard to the distribution standard must be sought for in something ele of profits. I have Leard some rperts of than sound lusiness judgment. Now it is clemours for a larger dividend, but I centot generally admitted that the fccd tide of far, think that such can have come from any share the Dock Company's picsperity, FO Eelders Laving the permanent interess of the was attained in the year 1901, when the Company at least, and I for one trust the handsome profit of $906,558.66 was petted for Ecard will continue to set its face igidly the first lalf-year. Then the amount agreed to against any attempts er tendency to viduly for writing down was only $185,870.71, or 20.45 milk" the Company in that wry, especial'y so per cent. in proportion to the net profit. For lorg as the Company's indeltedness mounts the first half of the current year the ebb tide to any considerable sim. 1 ɛce cur old friend has set in and our profits have been reduced to the Admiralty Leen shows up this time in au £373,460.68; yet the amount we are seriously unpleasant light, the dollar amount being asked to consent to for writing down is alcat the same as it was quite a time rgo. $219,437,76, or 58.75 per cent. Wht Lusiness although the sterling amount bas leen corsi- or logical argument can be adduced in explana- derably reduced. I reccllect quite a rumber of tion of so great an arithmetical disparity it is years ago advocating at cre of these meetings not within cur comprehension to discover. I would Le desirability of remitting the whole amount of like to refresh your memories about the procedure the Lean to Erglard since the Admiralty would of former years, ty from 31st December, 1895, not apparently accept payment of the whole to 31st December, 1897, during which jericd smcent at one time, and this course, with the the uniform dividend end bonus of 3 scd 4 per exchange prevailing, would, I think, have saved
cent. respectively were distributed to the share-for the Company a good deal had it Leen adopted, holders. Dotwithstanding the fact that at one even taking into account the low rate of time a variation of £& per cent, icok place in interest the money would Lave been earning en our net earnings, riz., letween 30th June, 1826, fixed de csit. But other counsels prevailed. and 31st December. 1897; the figures are:- You have referred to the matter of the picposed $569,073 net profit of six months ending new Deck, and I think the Beard Las taken a 30th June, 1816 and $268,436 ret profit wise course in postponing to a future meeting of six months erding 31st December, 1897. the consideration of this important project, so
Times cut of timler bare we been told as to allow the matter to have the full attention that the value of our premises, cur stock
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for adoption; but that one such can le found, I don't for a moment doubt. I ask for no vote in favour of my amendment ; it should appeal to you on its own merits. I therefore move that the amount proposed to be
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