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November 12, 1906.]
CHINA OVERLAND TRADE REPORT.
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391
And this is the way it is proposed to carry out | looking to future expansion, it seems a safe the idea. A new Wharf and Godown Com- prophecy that your property, if developed as pany, entirely separate from the Dock Com anggested, will double in valus within ten years. pany, will be floated with a capital of Tla. One thing you may be sure of; if we do 1 780,000 in 71,200 shares of Tls, 25 sach. 55,200 | not fake this scheme in ban, others fully paid-up shares will be allotted to the will do so and will make the profits we Dock Company, and will represent a payment ought to secure for ourselves. An argument of Tls. 1,330,000 for the Old Dook and for 110 | against the scheme is that the shareholders mow of waste land between the Cosmopolitan will raise antagonism in certain quarters and and International Docks. The remaining alienate business from the Dock Company. 18,000 shares will not be issued until the busi This seems rather far-fotobed, as the business ness of the new Company justifies or demands of the Dock Company depends on a manage- more capital. The actual cash for developing meat which gives good work for reasonable the property will be provided by means of 7 per prices and shows a proper energy in securing cent debentures to the amount of Tis. 1,220,000 patronage. Moreover, by advertising the land to be issued as foods are required; and for sale the Directors have shown that they the placing of these debeatures will be the recognize the advisability of disposing of it, work of the Committee to be nominated by you. and the use we propose to put it to is probably I am anthorized to say that once you have what any purchaser would do with it. given the Committee the necessary authority. Further, doubts are expressed 88 to there will be no difficulty in this matter. The whether the debenture money Can be first question we have to ask ourselves is raised and about the payment of the whether the amount to be raised by debentures interest. The answer is that inquiries have will be sufficient to develope the property. | madgit clear that the Committee will be able to Three independent sets of estimates have been get what is wanted, that we shall shortly be able drawn up, and we have selected figures rather to pay the interest out of earnings and that we in excess of the highest, so as to be on the safe shall have ample tunds to meet the interest side. We find that Tis. 400,000 will cover the before that time arrives. You must not be led cost of building six four-storeyed godowas on away by the wild talk indulged in by interested the Old Dick properly, fully equipped with parties who say that nothing can be earned for electric lifts, electric light, water supply at least four years. The Old Dock property hydrants, etc., as well of partially filling should be completely developed in twelve or at in the Dock, leaving A space for most fifteen months, and eighteen months will lighters to enter and discharge.
The ex- be sufficient to develop the property on the other penditure on the Cosmopolitan property will side. I am told that we can begin to earn be Tls. 600,000, and will provide six four-something before everything is completed. The storeyed godowns, together with wharves, raila. objection that if we wait longer we shall get trucks, cranes, lifts, etc. This makes a total more for the land appears to me particuarly expenditure of Tis. 1,000,000 and leaves us with futile. The result of offering the land Tls. 22,000 for interest and contingencies. for sale shows that the present offer is The next question to be considered is whether favourable, and it would be foolish to wait an the enterprise will pay, and I may say that we
indefinite period in the hope of getting an extra have already received assurances of a consider- lakh or two when we can send up the value of able volume of business. In the Old Dock we the property immediately by developing it, and shall have storage space for 2.730,000 cubic
earn a handsome dividend into the bargain. feet of cargo. The current rate for storage Yon must not forget that capital at 7 per cent appears to average over oue and a half tael doubles itself in about ten years, but there is no cents per cubic foot. I admit that this is a prospect of our land, if left undeveloped, in- rough approximation. Charges are made by creasing in value at that rate. I wish strongly the picul, ca-k, case, bale, cubic foot, etc., but I to impress upon you that if you pass this resolu- assume that they all bear some relation to the tion you will simply authorize the proposed space occupied. I have here a list of Committee to carry out the project if they find charges, and judging from the rates per
it feasible. Without your authority they can cubic foot, the average I have taken seems do nothing for instance, they cannot make fair. Now assuming that our space is only half arrangements for placing the debentures. We occupied and that the rate is only three-quarters pledge ourselves that at the Confirmatory Meet- of tael cent, the Old Dock property ing the Committee will present a full report should earn Tl. 121,500 per annum. On in which they will inform you whether the the other side we shall have storage space estimates of expenditure are within the for about 3,600,000 feet, which on a similar mark, whether the profits expected are likely basis of calculation should earn Tls. 162,000 to be realized, and whether the debenture money per annum, or a total for the two properties
can be raised without any difficulty. If you are of 1ls. 283,500. As the working expenses not satisfied with the report, or if in the meantime would be more than covered under ordinary a better offer has been received, you need not circumstances by the dues paid by steamers, confirm your decision of to-day and you will and by the storage in the open of coal, timber have lost nothing. On the other hand, if you old iron and other cargo, this would be pass the resolution, you will obviously be in a sufficient, after paying the interest on the much stronger position for dealing with any debentures, to allow a dividend on the shares offer that may come along. There is some of over 14 per cent. This, Gentlemen, is vague talk of expected offers, and you will make the scheme we propose for the development it clear that they must be better than Th. of part of your unremunerative property, and 1,380,000. In other words you start competition it rests with you to decide whether you will which is healthy, sud under any circumstances sanction it. It will deduct nothing from the the report of the Committee will be an excellent dividends you receive from the Dock Company, advertisement, as it will show what can be done☀ as the earnings of the Docks will not be with your property. Gentlemen, we are passing lessened. Giving up the Old Dock will be a through hard times. Our shares show a serious saving, not а loss of income, and the 110 depreciation and our dividends have fallen. It is mow of land on the other side brings you time we did something to help ourselves by in nothing. On the other hand the scheme palling together. This is au honest and promises a handsome dividend which cannot be practicable scheme which men well able to judge earned under present conditions. The criticisms are convinced will be very profitable, and the of the scheme that I have heard can be easily opposition to it in certain quarters shows that disposed of. There are still people in Shanghai success is anticipated. Seeing that you will who do not realize the pace at which the trade have an opportunity of reverting your decision of the place continues to grow and they argue
at the Confirmatory Meeting, if not entirely that only the unusual conditions of the past year
satisfied with the report of the Committee, I are responsible for the large profits lately made urge you to give it a chance and to see what the in godown business. They forget the number able and experienced men to be nominated under of men, by no means foolish, who have considered the next resolution can do for you. (Applause). it to their advantage to erect godowns in various parts of the Settlement, and they forget the influence likely to be exercised by the work of the Conservancy Board and by the extension of the railway. Neither do they seem aware of the difficulties at present experienced by shipowners in finding accommodation for the discharge and storage of cargo. Judging from the past and
in the capital of such proposed new Company."
I may mention here that the second resolution regarding the reduction of capital will not be moved, as we are advised that it is unne- cessary and pre nature at this stage. It con- CPTDS a matter which may be left to the Directors, and which it would not be convenient to deal with antil the arrangements with the new Company are satisfactorily completed. Before saying anything regarding the amended resolution, I wish to correct certain misconc1p. tions; I might almost call them wilful mis-state- ments, which have been current lately. It has been said that the scheme now to be proposed has been invented by certain speculators for the purpose of influencing the market; that it is not intended to materialize; that if it does materialize it will not pay; and that even if it pays you can expect no return for at least four years. Every one of these statements is untrue. The scheme owes its inception to Mr. A. M. Marshall, and has been elab rated by him in consultation with some of the keenest busi- ness men in the place. Since his election to the Board, Mr. Marshall has been very active in our interests, and as his own business bas made him aware of the pressing need for more facilities for the discharge and storage of | cargo, he has conceived the idea of benefiting the shareholders of this Company by showing them how they can uake 8 profit by supplying that need. If you pass the amended resolution the scheme will rapidly take concrete form, and I shali shortly lay before you figures showing that there need be no fear of failure. Above all things I wish to make it clear that this is an honest scheme. Past experience may have made you a little shy of "definite offers" and the like, but I beg to assure you that this scheme has been taken in hand with the object of benefiting the shareholders of the Dock Company and that no one else will make anything out of it. There is another point I wish to touch on. The letter signed by thirty. eight shareholders was a preliminary proposal intended for the information of the Directors, specifying the business to be transacted at this meeting, as required by paragraph 63 of the Article of the Association. It was not intended to be circulated as an offer to the share. holders, nor to be considered as the definite form of а resolution to be submitted at this meeting. Since the letter was sent in, the promoters of the scheme have been hard at work considering ways and means. The first idea of offering alternatively cash or scrip has had to be abandoned, in order that the debenture money may be more easily raised. But you will understand that the scrip offered is of bigher face value than any cash offer could have been under present circumstances. Now, Gentlemen, you are aware that we have certain valuable property that practically gives us no return. The passive policy of letting it alone with the idea that it would increase in value every year may have had something to be said for it in the past, but we consider that the time has come to do something of a more active nature. So much potential wealth must not be wasted, and it would be altogether 00- reasonable if on desire to develop our property in the most profitable way were to give rise to antagonism or to the im- pression that we wish to enter into damaging competition with similar ex. isting institutions. There are three ways in which this property might be dealt with. Under happier circumstances it might be used in the extension of our present business; but conditions I need not enlarge upon do not encourage this plan; besides, we have other land available for that. ne might sell it outright for cash if we could secure a suitable offer. There are those who are anxious to obtain the property at their own figure, and who think that by waiting long❘ enough they will succeed. In this I hope you will show they are mistaken. They would only purchase to make a profit out of the deal, and it would seem the wisest plan to dispose of it to ourselves and make the profit ourselves. This is what is intended by the scheme submitted to you to-day. It is proposed to develop this valuable property in such a way that the shareholders of the Dock Company will get the full benefit without being called upon to put their hands into their pockets,
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Sir Charles Dudgeon-Mr. Chairman and gentlemen. I have muca pleasure in seconding the amendment proposed by Mr. Taylor. You have heard the very full manner in which he has explained the scheme, and it is therefore not necessary for me to say anything further. I would like to say it seems to me that seeing the amount of dead
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