'The Balnneesheot figures, would expect, reflect "the" chang conditions, under which the business of the Bank is" now carried on. 'Although the: total figures are. prac tically the "same, there are' several changes in "the Agures "comprising {that total which I consider merit a few. words of explanation.
First, the total of current and other" accounte=ini other words, Goposits at call—show a large in: erence of. 24,096,602, whereas fixed Alopositsthat" is, deposits only repayable. at the and of. periods of say, ale or twelve months after" the date of deposit—at_£15350,100. show decrease of £2,770,707. Combining ul deposits, there is on increase of What, then, is our reaction as bankers to this movement? Let tur for one moment to the assets side of the balance-sheet. Our. most liquid assets—cash in. hand and bankers—has Increased "by £1,860,- and, Is approximately" 18.60" per cent of our" sight labllties "on feurrent accounts. The second. item order of liquidity, bills change at £10.180417, "shows an Increase of 21,020,027. 'Taking. cash hand" and" bills" of exchange together, these two items represent 30.72 pot cent. of all the sight Hiabilltics of the 'Bank, which fam sure you with agree' with me isan ex= Seedingly strong and liquid position, Returning now. to, the abilities, you will see that bills payable have Increased "by £048,801, and. it may the that some part of this increase is duo to the uso of the Air Mall to fettle payments by drafts instead of 'Acceptances on account of customers are- fess than a. year ago £1,100078, due very' largely to the hostilities in the Bast, and Joans pay able by. £1,406,760, which is. only lo be expected "when you consider the increase in Our cash resources, fo which T referred a few moments 'There are two other items to which 1 would draw. your attention on, the assolg, side. Government and other Securities, £21,204,004, "compares with £23,140406" at' 1st, December, 1980, 9 decrease of £1,846,402, and woul emphasise once more that a large proportion of this total consists Bullion on hand and. in transit i tess by just. over £1,000,000, but, you witl readily understand, untos bullion is moving. realy" this item must of necessity. remain small, Backbone of Earning Power Bills discounted and loans—the backbone of our caring power—is practically the same as a year ago: {nd can only express the hope that world conditions in 1938 will enable Us as bankers to participate in' an Increased volume: of trade to" the mutual bone of both traders and ourselves.
'The result of the your's trading is shown in the profit and toss account '44 0 net profit\of £401,006, after providing' for all bad and "doubtful flobis, against 400,002" year ago, 4 decrease of £8,017. "When you Temember that Tost year we Nave fad to provide a substantial! sum for National Defence Contribution. trust you will not consider the result unsatisfactory. "We paid' the Usual interim dividend last September, which absorbed £210,000, leaving at'our disposal £407,119 183, YOd. "Subject to your approval, we propose to pay a final dividend at {he'rate of 14) per cent. per annum, {o" allocate £35,000. again. tothe Gmcors' Pension Fund, to set aside £40,000 on account of contingencies exnelly the same as a year ago—and to "carry forward "the balance of £178,185 3s. 6d. to the current yea 'The national importance of this subject is, in my' opinion, sufelent COMPANY MEETINGS (continued) apology for the repeated references: jin my speeches to international' and overseas. trade.
Ids, I suppose, only natural that manufacturers hitherto operating under a free trade system' should, upon being able to benefit" from a protected domestic market, lose some Interest in overseas trade, particularly when exporting Is so diMeult owing to the fiscal and currency re~ straints now operative in various countries. The change to 2 modified protective system in this country was designed to. alleviate a disability. which was working to our detriment, but it" was not intended that the Himited protection which the domestic trade so acquired could dispetise with the necessity of encouraging to the utmost our export trade, on which the health of our industrial structure must depend.
We all recognise the necessity for the prompt completion of the Government's rearmament programme. but the impetus it gives to industrial expansion cannot be regarded as 2 normal economic development.
Prosperity Returning At the beginning of 1997 there was 2 feeling that world prosperity was at last returning. Commodity prices and freights were rising: the purchasing power of the primary producers. was broadening, and. there was a prospect of a sustained expansion in the world exchanges of produce and. manufactures, This promise of recovery was disturbed in the frst instance by a too rapid and Uunjustifted advance in the prices of certain primary products caused by the baneful activity of speculators in the markets for these primary products, A warning sounded by the American Administration that mea: Jsures might, be necessary to curb this unwholesome speculation was followed by-a lack of confidence in the price level then ruling, and this Hock of confidence "deepened and, became more widespread as clouds, peared on the political horizon. Ili the summer came the Far Eastern crisis to add to an unstable economic situation in America the factor of apprehensiveness regarding the international. situation. The British index of prices for primary products which stood at 163.9 at the end of December, 1936, rose of 181.9 by the end of March, 1937. "Since then it has dectined abruptly almost without break till at the end of 1937 It had tation to 1474 lad The World is still hoping for a recovery in American business and trade" activity, on which—as the USA. Is the largest, individual conjsumer—the restoration of confidence in the general outlook for primary producers so greatly depends, Ching, In the Far Eastern sphere of the Bank's operations the year opened in an atmosphere of cautious optimism. Superfteially, at least, the political situation in China seemed to be more hopeful than at any time since the inauguration of the Republic.
The unification movement had made substantial progress, the new national currency had gained stability, and there were indications that the national. finances were being reorganised along lines appropriate to a modern progressive State.
An extensive programme of industrialisation, largely initiated under State auspices, was embarked upon, and during the opening months of the year, negotiations were resumed, afler a lapse of over two decades, for obtaining foreign capital to finance extensions to China's inadequate railway system.
Economic Polley For reasons which can now be easily understood, the Chinese Government last spring found itself obliged to re-orientate its economic policy towards the requirements of National Defence, and, as a result, Industrial development' was proceed: ed with in a strategic rather than constructive direction. Principles of economic nationalism' gained wider faeceptance in. Chinese political circles, and whereas at the end of 1936 a new era of Sino-Foreign ccohornie ce-operation seemed about to dawn, It soon became apparent in 1037 that little real progress Chinese economy could be expected until Felatlons between the Chinese and Japanese Governments had become normal. As late as May, there were evidences that an influen: tial body. of Japanese opinion was anxious that their Government should endeavour to bring about a_percep-{ible relaxation of Sino-Japanese tension, but already forces had been released which could no longer be controlled.
The Charter of the Central Reserve Bank of China was approved by the legislative body at the end of June, but the terms have not been ratified by the National Government, and in consequence, the Centra} Reserve Bank Bill has not yet become law.
"The outbreak of hostilities in the Shanghai district Jast August affected the "Chinese commercial banks adversely and, revealed that their assets were far from liquid, in many coses due to their large investments in the Chinese Goverment Internal Loans, and to advances against
Text read from the printed page and cleaned; old type leaves the occasional error.