Aug. 27.
YesteRpaY mornifig the announcement was made that the third issue of Municipal deben-} tures for the present finance year had been subscribed. Like! the two previous issues it was) a six per cent. loan issued at) ninety-nine, and its total amount was Tls. 750,000. The first issue} during the present financial year was of Ts. 1,000,000, and it may} be remembered that a few weeks were required before the amount! was forthcoming. The slow] arrival of subscriptions was} rightly attributed to sentiment, for at that time the position of Municipal roads—and especially their poticing by Chinese authorities—seemed to be in. some doubt, and it is impossible to} blink the fact that investors had) become slightly dubious as_'o} the future. At any rate the loan! was subscribed, and then, on! exactly the same terms, another sue of debentures amounting to Tls. 500,000 was offered. In the meantime the Council had) stated definitely its position of relying on the Land Regulations fin respect of these extra-Settlement roads, and at once there was a change of set ent, the, required amount being quickly} available. The response to the last issue has also been satisfactory, and to date during the present financial year debentures have been floated to the extent taels. fof two and a quarter million
With this Yigure before us we may consider how the extraordinary budget of the Council now stands. It will be remembered that in the early part of the last fiscal year something, that might be described as finan-[cial fireworks was seen, lakhs of debentures being oversubscribed in an hour or two. Then the whole local political outlook was altered, and the result w: that the Council had to carry over to the present year on its extraordinary budget a deficit of about two and 'a half million taels. What hag happened in the present fiscal year so far is that the debenture flotations have met this deficit. Public subscriptions to the issue of debentures are two and a quarter millions and from the Municipal Savings Bank has occured about three and a -half lakhs more, and accordingly there are the funds to meet last ye deficit. The debentures thorized for issue during the present year amount to five million taels, so that for the extraordinary expenditure of the Council we now require to raise roughly two and a half millions. This is a small sum in comparison with what has been budgeted for in other years, but it may be remembered that the Chairman in his speech at the Ratepayers' Meeting stated that all departmental estimates of expenditure had been rigorously cut down, and this very fact should quite properly have good sentimental effect on the Municipal debenture market.
The exercise of such—strict economy on the part of any authority, municipal or otherwise, issuing loans, is always a good recommendation for a loan, just as extravagance in admini stration operates in the contrary direction. It has just as much 'a bearing on the security offered to the investor as anything el does, and in considering the recent and further issues of these Municipal debentures we have to look to this particular subject of security, It require very little to influence a market} Jone way or another when this point is at issue, and even the appearance of Chinese police on Municipal roads outside the Settlement had an adverse effect on the first issue of the present year. AS soon, how-fever, as the Municipal Council took' up a firm stand with the Land Regulations at its back, a distinct improvement became evident. Nevertheless in many] minds a feeling of uncertainty! still prevails, and it may well be imagined that in respect of the flotation of a further considerable amount such as two millions of debentures, we are all interested knowing how that uncertainty will operate. As a matter of fact, in regard to Municipal loans, there is not the slightest reason for it. The uncertainties in Peking with regard to tariffs and extraterritoriality have provided the] groundwork for it, but there is too much security from the constitution of the Land Regulations, too strong a foreign inter-these loans and above all too well-established a Chinese interest—both landed and hi Shanghai to allow anything like their wholescie depreciation. The fact that Chinese and foreign concerns still consider it worth while to build palatial offices and residence in Shanghai should remove any doubt on the side of Shih-hsun, Provincial Commissioner of Finance for 'Kiangsu, and concurrent Managing Director of the Kiangsu Provincial Bank, has tendered his resignation from' the latter post and recommended Mr. Chen Sen-chu, Manager of the Anking branch of the Bank of Communications, to succeed him,
Text read from the printed page and cleaned; old type leaves the occasional error.