To the Editor of the "Nonri-Ciika Dany News"
have watched with much Interest the correspondence in your columns regarding the _Shanghat Charges of Rubber Companies, and Tcannot help thinking that the writers would have done much better to have made some enquiries of the Secretaries and General Managers, before sending in their views for publication, 'The frst thing that struck me was} that Mr. Hickuine based his claim, thal these charges were unfairly hig! fon the percentage of the net sales. This, to me, is not the true basis on. which an" overcharge should be claimed, for every year's average price varies, and therefore the percentage also, During the year 1626-88 rubber prices were very low and OMlce Expenses would bear a very high percentage of the net sales price. At the present ruling. prices of course the percentage 1s much smaller, To my way of thinking it would be much fairer to compare the total of the Shanghai Ofice Charges (in-eluding Secretaries and Directors) with the "All-in" Costs. Even here We rub against the question of Exchange for all other charges are in Straits Currency, but the percentage can assily be ascertained, During those years of low prices, when very, very few Companies were ble to show a profit, most showing.
heavy deficit, the Shanghai Secretaries and General Managers were loyal to their Shareholders, and it 18 well known that many" liguidations Would have had to take place, had it not been for sacrifices made' by the Management and Staff, in some cases. @ctual financial aid, which enabled the concerns to pull'through. I have. hot the actual figures but I know that these sacrifices of management fees ete, amount in the aggregate to very large sum.
Now to turn to the subject of "un fairly high Shanghai Management Charges" the figures for nine Estates lurider one control in Shanghai give the following results:—
Capital 19,412,438 shares of 10
Secretarial fees $49,256.48
Directors fees $23,042.08, $72,900.56 thus if these fees were reduced one. half the saving would be 0.27 vent spor share, Obviously there could be increase in the dividend, due to this item of economy.
'Mention was made of the Straits Agencies being in the hands of Messrs. Kennedy, Burkill & Ca, Ltd, more less Inferring that it-was formed for the purpose of adding to the 'Shanghai General Managers' earnings. T happen to know the reason of this Company's formation and when the time comes, I feel sure the Shareholders will be satisfied with the explanation which the General Managers and Secretaries in Shanghai will make, On the whole it seems to me that most of your correspondents have accepted the statement anent "unfairly high Chi without making any enquiries as to the truth of the statement, This may probably be due to the fact that no reply has been forthcoming from the General Managers.
can quite understand this attitude of the General Managers. 1 know that they are anxious and willing to give every information possible to Shareholders when approached, but it is quite natural that they should take no notice of what appears to be a per~ sonal attack, 'After all, their remuneration is a matter between themselves and the Diretors of the Companies under thely control, Now that' the question of their fees has been raised, 1 have no doubt that the Directors, on the ex-pity of the existing Agreements, will fo thoroughly into the matter. In the meantime the managements are entitled to fair play.
subscribed towards the initial expenses of forming the Shareholders "Protection Association, for T think that there is far too much apathy exhibited by investors in the management of their affairs, Secretaries often have dimeulty in finding a quorum to attend the Annual Meet-Ings and therefore this Association should not be discouraged.
Shanghat, Nov. 20.
Text read from the printed page and cleaned; old type leaves the occasional error.