In a previous article, in reviewing the report and accounts of the China Merchants' Company for the year ended August Inst, we remarked that it was difficalt for an outsider to form any correct opinion regarding the financial position of the Company so long as the data on which he had to go were the bald accounts which the Company from year to year publish, A comparison of the accounts for the four years, during which the Company has been working on its present basis, brings at once into prominence some grave defeots from the point of view of a European joint-stock company. In thus publicly analysing the Company's accounts from year to year, we wish to premise our figures by stating that we have no other object in doing so than simple cariosity to observe how far the Chinese have that aptitude for trading in companies where the managers are trustees for shareholders, which they undoubtedly have as private persons.
The most remarkable and striking point about the accounts of this com. pany is the extraordinary disproportion that exists between the share capital and the amount of borrowed money with which the Company's operations are conducted, as stated in the liability side of the annual balance sheet. We have pointed this out year after year, as evidence that the Company's creditors best friends, and that, though they are unwilling to invest exchequer or private fands permanently in it, they are willing to help to float it into vigorous existence as a Navigation Company of the highest class, by lending it temporarily sach sume as it may requite at low or nominal rates of interest. Calling the year just concluded 1880, this disproportion appears thus srr. s7@. 87%, 1880, Share Capital... 730,200 761,000 $00,600 880,800 Borrowed Money.2,893,000 8,819,000 3,135,000 8,056,800
As we remarked in 1878, it is a penny worth of bread to an intolerable deal of sack; ack more than enough to upset or waterlog any European public company. The borrowed money appears to be from three sources; viz., moneys advanced by Shen Pao-chen and other high officials to enable the Company to buy up the Shanghni Steam Navigntion Company, in all, about Tls. 1,900,000, more or less; sundry advances from banks avd private persons, varying between Tls. 500,000
Text read from the printed page and cleaned; old type leaves the occasional error.