The principal cause of the defi-Jciency in Shanghai is stated to be due to losses on exchange contracts from June, 1923, to June 1924, but. jespesially from September to December, 1923, and it is claimed that even these were largely incurred on "be-[half of Hongkong and New York.
The bank held a long position in sterling and gold dollars expecting gold to appreciate in the Autumn. However, gold depreciated, said to be owing to the earthquake in Japan and sterling bought at low rates had to be sold at high rates, og., purchase at 3% had to bbe sold at 3/4 and gold dollar bought at 70 had to be sold at 72. Losses fon exchange contracts are shown as Tis, 378,502, It is claimed for branch that's large portion of this is due to purchases on behalf of Honour Judge Sir Skinner Turner jin H. M. Supreme Court on Monday. jin an action brought by the Bank! Jagainst W. R. Coleman, Mr. Tycho Wing represented the Banque and Mr. P. W. Goldring the The Banque's claim was for the sum of $543, money spent on behalf jof defendant by plaintiffs, expenses incurred on his behalf, and interest, jo: the rate of eight per cent. agreed upon by him, Mr. Wing said an affidavit had been put in by defendant in which stated that on May 31 he placed the sum of Frs, 40,000 on deposit jin the Tientsin branch of the bank. He gave instructions that this sum was to be converted into French [Government Bonds, to be placed on deposit with the bank against his overdraft.. They failed to sell on the day he gave his instructions, jand delayed the matter for a period of months with the result that they got considerably less for the bonds than they would have Jdone had they sold when they received his instructions. Therefore, instead of a larger debit there should have been a credit balance.
Mr. Wing went on to say. that this statement or affidavit, even assuming it to be accurate, did. not matitute a. proper answer to the true defence. He therefore asked for judgment for the ti claim, which, of course, would Nleave defendant at liberty to make claim against the Banque in the French Courts ax a suit for Mr. Goldring submitted that he eras entitled to defend on that affidavit. He pointed out that had for new grounds of appeal. The fapyeal was heard, and defendant [got everything he asked for. Now he took up the position: "It is true had everything I asked, for, but ido not like the reasons of the Court for giving it to me." An appeal [could not be based on those lines.
Mr. Wing then went on to apply Hor an order for payment out to tiff of the moneys in the Court, Jand further that plaintiffs be order led to pay the costs as taxed by th Court, together with the costs of the lapplicntion, and the costs which the defendants' deducted from the Jamounts they paid into Court, Mr, Reader Harris pointed out that Mr. Wing had failed to pro-Jduce any authority, and. furthermore he challenged him to find any such authority, either in the Home Practice or their own. Nothing could justify the payment out of money' which was the subject matter of inter-pleader proceedings, latter an inter-pleader order had been made. The money could not be paid four until either the issue had been tried or one of the two parties was Jdcbarred from making any claim in leonnexion with the trial of the tissue. To put it simply, claimant had to be debarred before plainti {could receive payment of the money. To be debarred he must be proved in default, The only way in which he could possibly be in default. was jon an order. made by his Lordship and afterwards rol by the Fall Court. He ted, with the greatest respect, that the only possible defaulter was the Court itself, which,: having once granted Jan interpleader. order, was) bound either to proceed with, or adjourn the trial. Tt had done neither, and to the capital of the company are being deal: with in Hongkong and I move not had time, since taking the matter in'hand, to' obtain precise the Shanghai branch, which yet been signed by any responsible director or officer, it would appear that the local creditors might ex-details, pect a dividend of approximately The balance sheet at June 80, 1923 60 per cent. but this also must be showed a credit to profit and loss, treated with reserve, as the book account of $73,082.69, out of which debts are a most uncertain quantity. 4 dividend was proposed, and I Up to the present the result of believe paid, of 6 per cent. absorbing attempts at collecting there debts further depreciation was have been disappointing, but poss-written off and a balance of $3139, bly the appointment of a per-o2"carried forward. manent liquidator and the more Suspension of Payment Hforcible measures now being taken The bank suspended payment in will remedy this. Unfortunately, the disturbed conditions of last Hongkong on June consequence of cables received, thi Autumn, especially around Shang-hal, almost entirely prevented the branch, as well ae others, did' lik collection of debts. and matters wise, the Shanghai Branch suspend-have improved only slightly since ing payment also on June 12, 1924.
'A petition to wind up the com-then, "What improvement there has been, has taken place since the pany was immediately presented in|.
Lunar New Year. Certain funds Hongkong and another in Shanghai. which should be available here are In Hongkong Mr. John Fleming. held up owing to commitments at appointed special manager and Mr, T. Martin subsequently the head office, debtors claiming sets-off, pointed liquidators. Mr.
wax appointed provisional Debtors in Bankruptey in Shanghai to collect the!
Exchange contracts were carried to take charge of thei, through, and resulted in a net profit company's property in China, which of over Tls. 49,000, but unfortunate-uppointment covered the Shanghai y the greater part of this is held Canton Branches. He is still) by the commitments at head ing in Shanghai, but has been office and by an action which is unite unable to obtain any control pending in the Mixed Court. The over the Canton branch. Mr. Paterson appointed as his agent Mr. John, Fleming of Hongkong, who found commencement of the that the Canton office had been debtors amounting to closed by the military. Subsequent have gone into special manager was appointed, bankruptey or liquidation, and the who stated that his authority was bulk of this amount is likely to be lost. Very little security was held the Municipality. of Canton, There the bank and guarantees do not uve no signs as yet of any statement of accounts having been pre-amount to very much, thus causing pared although the book debts to be a very doubtful the agent sent a representative to endeavour to Advances appear to have been!
There have been some changes sine then and Tam. ins made to many people, who should not formed that the Chinese Chamber have had them without offering sub-Commerce and the Depositor's stantial securhy or guarantee and Assneiation now have a representa: in consequence most of the now retive of their own in charge of the maining debte entail an immense amount of trouble in collection, A formal request been made to the which collection consequently can nese authorities, asking that the rly proceed at a very slow pace. e's in Canton be handed over, The policy of the bank evidently was without result, to obtain a footing in Shanghai the The British and Chinese authori" best way they could, and naturally in Canton do not recognize this the effect of this is felt bank as a British company and con. sent civeumstanees. Dealings with sequently the provisional liquidator banks abroad must necessarily take has been quite unable to obtain any considerable time and much corre: control over the branch there and Dondence ix necessary before all matters can be finally settled. It has obscure, the situation is therefore still een impossible to keep on the bank staff, as they have all drifted away Assets to be Pooled permanent positions, and some 8 texards the other branches, have left Shanghai vitt—Saigon and New York, The Directors French government official, Mr.
Brizon, "styled - the provisional All the directors are residents of Hongkong, Canton or Saigon, with Hongkong and New York,—which were subsequently cancelled and had to be sold at a loss Bad debts have caused a loss of over Ts. 30,000, but another amount, of Tls. 100,000 is obviously bad or doubtful. The banking business in Shanghai appears to have been carried on at a considerable loss, We shall probably be in possession of information in the near future as to the progress of the liquidation in Hongkong. At present T can give
that further "information respecting This being the first meeting creditors, there is a matter which, must be considered by you namely: whether application should be made to the Court for the appointment, lof a Ligi ithe Banque de L'Indo-Chine been British corporation he would have filed a counter claim, but could not do this as plaintiff bank was not subject to the jurisdiction the Court.
Mr. Wing suggested that his Lordship give judgment for plain-for the amount claimed, with stay of execution for as long as his Lordship thought—sufficient, leaving both parties with leave to Lordship agreed to this Jcourse, and delivered judgment for plainti with a stay of execution Jof one month.
Text read from the printed page and cleaned; old type leaves the occasional error.