The first annual general meeting of the "Shell" Transport and Trading Company was held on the 17th of August at the offices, 16, Leadenhall-street, E.C., Sir Marcus Samuel presiding The notice convening the meeting having been read by the Secretary, Mr. E. Reid, the report of the directors "was taken as read.
The Chairman said: In_presenting the first balance-sheet of the ' Shell" Transport and Trading Company, Limited, for the year ending 3ist December, 1898, it is satisfactory to the directors to find that the profits of the trading are above the average of the three year previous to the purchase of the business by the company. As shown in the balance-sheet, they have been arrived at after debiting to them renewals to plant and installation, and cost of up-keep of steamers. The directors have domed it desirable to write off to profit and loss the whole of the preliminary expenses, amounting to £5,410 Us. 5d. They have also provided the large sum of £80,173 19s. 6d. as a provision for depreciation of steamers and installations and for provision for the loss of the steamer Pectan, over and above the sum recovered from the underwriters compared with the amount at which it was possible replace the vessel, it being the object and intention of the directors to place the company ina thoroughly strong position before paying increased dividends. Turning to the assets account, it will be seen that £84,664 Ads, 3d. was expended during the 12 months for further purchase of steamers and new installations and extensions. I have now to call attention to the item under the head of the Nederlandsch Indische Industrie en Handelmaatschappij. In order to comply with the requirements of the Dutch Government and to obtain a proper transfer of the concessions from the vendor, it was necessary to constitute a company which, according to Dutch law, v's compelled to show a ets working cap tal in addition to the concessions, themselves costing £100,288 16s. 9d. Further reference to this account wil] show that this company subscribed in cash as wor ing capital the sum of £83,333 6s. 8d., and further advanced to' the Dutch Company up to December, 1898, the sum of £160,353 19s. 4d. The profits of the company are the more satisfactory, in that so large a sum as £343,976 25. 9d. of the company's assets had not during the year under review contributed in' any way to its earning power. The year has not been barren of many incidents of great interest. Thanks to the steamer Pectan, we were able to render effective aid to H.MLS. Vieloriousat a somewhat critical time—(hear, hear). It has been therefore, with the deeper regret that your directors have seen the loss of this fine vessel in consequence of collision with a small French steamer. The loss has been a heavy one to the company, inasmuch as we have been deprived of the earning power of the ship for very many months, but_your directors have the satisfaction of stating that after inviting tenders they were able to place an order last year with Messrs. Armstrong, Whitworth and Ca. for three steamers of 8,000 tons d.w. each upon most favourable terms, and at a price many thousands of pounds less than they could be purchased at to-day. In spite of the congested state of the shipbuilding trade, the builders are sanguine of being able to deliver us of the vessels during the current year, and the third early in 1900, and we believe the possession of these steamers—much Inrger than any we have yet possessed—wil] add materially to the earning power of the company's fleets, which will then number 23 steamers: of a register of about 79,000 tons. Tregret that, acting upon the advice of our solicitors, and in consequence of the absolute impossibility for aliens to obtain justice in France under the present state of law in that country, we have not felt justified in taking legal proceedingsazainst the vessel which collided with and sank the Pectan. These proceedings we should have had to take in the French courts, and Messrs. Waltons inform us from their experience in recent litigation in France it, is quite impossible for English owners to get any justice in France. I have to note another very unsatisfactory feature again arising from the action of a foreign Government. The company some three years ago erected tanks at Vladivostock for kerosene. This is a very small market, and could only be supplied by steamers' discharging the balance of their cargo at ports en route. At the end of 1897 the Russian Government passed a law, to come into force in January 1900, prohibiting any steamers but those under the Russian flag trading between ports in the Black Sea and Russian possessions in the Far East, the effect of which is that after January of next year the company's steamers cannot trade between Batoum and Vladivostock. We have invoked the aid of the Foreign Office to obtain the revocation of this law, and I am bound to add that they have given the matter every attention, and have done everything they coul but I regret to say that it has been in vain, and the Russian Government have declined to make any exception in favour of tank steamers, and we shall he compelled consequently to dispose of our property in Viadivostock upon the best terms we can, and to remove our tanks from there. I have dwelt at some length upon this mat-showing what British trade interest pect if further territory in the Fy East falls into Russian hands—{hear, hear.). When Batoum was taken from Turkey a distinct pledge was given that it should remain an open port, and the law now passed excluding British ships from sailing thence to any part of the world, I maintain, is a most direct violation of this agreement. We are handicapped in many other ways by being compelled to draw our supplies of oil from Russia. There is no stability in rates fur transport, and the tariffs of railway rates are arbitrarily raised and lowered without any warning whatever to merchants, and apparently without any reason, rendering it exceedingly difficult"to regulate purchases or pr and making anything in fact but a hand-to-mouth business impracticable, and placing those engaged in the Russia trade at a great disadvantage with their powerful American competitors, who are able to enter into engagements for long periods ahead without having the dangers sprung upon them that act so detrimental ly to those engaged in any attempt to systematically develop the Russian business. Fortunately this company are Inngely dependent upon their trade as carriers rather than as oil merchants for their earning powers, and this will be more readily understood when I state that we now transport a quantity approaching 350,000 tons of merchandise yearly, an that every rise or fall in freights of 2s, 6d. per ton, consequently, means a difference in revenue of about' £45,000 per annum. It is with great satisfaction that your directors are able to announce that there is every prospect, within reasonable distance, of the company being able to wean them: selves from the Russian source of supply, and to obtain their requirements in a large measure from their own fields in Koetei, where we have spent, up t" date, a sum approaching £350,000 in developing the property and in constructing a refinery, now fast approaching completion, and capable, in full working order, of dealing with about 1,000,000 tons of crude oil per annum. From the experience which we now have of the field, we are sanguine that. in course of time sufficient oil will be produced on our territory to keep the works fully employed, and we are lad to say that the transfer of the concessions by the vendor to the Dutch Company has been duly sanctioned by the Netherlands Tudian authorities, and that this extremel; valuable property—one of the richest oilfields ini the world—is now fully and legally transferred to us. Considerable progress has been made by us in the introduction of petroleum as liquid fuel. The properties of the oil which our territory is yielding make it peculiarly adapted to this purpose, and we have every indication that, however large our production may be, a remunei tive field awaits it. Your directors, however, have deemed it advisable to avail of their transport and storage capacity to the fullest extent possible for the marketing of Eastern oils generally, and it is with very great satisfaction that they are able to announce the conclusion of a contract with the Moeara Enim Petroleum Mantschappij, of Amsterdam, for transport, storage, and marketing of all the oil which this corporation produce. The directors of that Company have already announced to their shareholders their entire satisfaction with the terms of the contract, and as the directors of the "Shell" Company content with it, and look fidence to it to very materially their profits, we may take it for granted that it has been concluded upon equitable terms to both companies. The Moeara Enim have made great og with their works, and their fields give promise of large production, and they anticipate being able to place refined oil on the market in the first half of 1900. Tt is sntisfuctory to note that the Company have such lange funds at their disposal that they have placed upon deposit with, the "Shell" company the sum of £100,000 at 4 per cent per annum intere-t. Following the policy which has contributed so much to the success of the!business, your directors
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