The annual speech of the Chairman of the Court of Directors of the Hongkong & Shanghai Banking Corporation at the meeting of shareholders is always an important event of the year, but rarely has so excellent an address been given in such difficult times, as that, delivered by Mr. G. Miskin last Saturday. It was a'sane survey of the whole situation in China, and, representing as it does the views of a bank whose future is inseparably bound up with this country, is of no little importance. After dealing with China trade, and the big improvement which was afoot until the outbreak of hostilities, the speaker warned his hearers that the political barometer was still too low to warrant a forecast of fine weather for merchants in the near future, and suggested that the fact, that channels of trade in Central China had been affected in a manner never before experienced, magnified the catastrophe in the eyes of many. If, as seemed likely, the Yangtze Valley continued to suffer throughout the spring and summer the effect on trade in general would naturally be serious. There would, however, be adjustments. A loss here would be a gain there and Mr. Miskin thought it unnecessary to be too despondent, remembering that while they would have to wait a while for real recovery, the recuperative powers of both China and Japan were great and would, in due course, be sure, Those are comforting words and should be remembered by those who are inclined to be too despondent over the future. That a disaster greater than the visitation of the Taipings has struck China is apparent, hut when the devastation that was wrought during that period is remembered, evidences of which can still be seen in many parts of China, and the recovery which was eventually made, there is every reason to believe that under modern conceptions of economic and industrial organization, such as did not exist in those times, the chances of speedy rehabilitation are considerably greater than they were before. It has to be remembered that the good earth is always there, and though many millions of those who tilled it have fled for the time being, a day will arrive when they will return and with it the trade which depends on them.
Mr. Miskin is probably wise in not endeavouring to pin blame on either party for the violation of the neutrality of Shanghai, when he points out that its status is likely to become a prominent subject for discussion in coming months, It is doubtful whether the intervention, which he suggests might have saved much of the property which was eventually damaged, would have proved successful, for it is apparent on looking back that once the trouble had started in northern China it was inevitable that the extension of hostilities should include Shanghai. The value of Shanghai and its present status was, however, clearly demonstrated, and had there been no such area as the foreign settlements in Shanghai it is possible that the damage wrought in the northern and eastern districts would háve spread to the whole of the city. Itis only necessary to visualize what might have happened in this connection to realize the justification for the belief that the continuance of some such arrangement is vital for the future prosperity of this port. Mr. Miskin suggests that when the Powers are prepared to negotiate and agree upon some new regime for Shanghai the situation will be altered but in the meantime he and his directors consider that as a result of recent events there is sufficient cause to call for a strengthening rather than a weakening of the present municipal administration in Shanghai. With that view there will be the completest agreement. This is no time to tamper with the constitution of the International Settlement of Shanghai nor the administration which has served the needs of this city so well in the past. It is possible that changes will have to be made in the future. Such are in fact being earnestly considered in many quarters, but all that happened in the past lends towards the conclusion that perhaps some elaboration of safeguards for the place, and adaptation of the present system to the changed circumstances will prove to be the best scheme for the future development of Shanghai.
This is quite clear—unless adequate arrangements are made to prevent a repetition of the unfortunate occurrences to which Shanghai has now been twice subjected, a sense of insecurity will continue to prevail, retarding the future development of the port even if it is not indefinitely postponed. It is possible, therefore, entirely to agree with Mr. Miskin in his contention that there should be guarantees which would ensure the observance of strict neutrality with regard to Shanghai's boundaries. Had it been possible to enforce the Sino-Japanese agreement of 1932 concerning the demilitarizedfabout by the adoption of the cross-bred as a area around Shanghai, the destruction which befell it would never have occurred. It was not, however, possible to secure guarantees that the terms of the agreement would be carried out, and it is not at all clear what guarantees can be provided in the future save that of a common agreement between all the parties concerned and determination to respect the arrangement. That there will have to be some change in the status of Shanghai, and, perhaps, its constitution seems to be undeniable, but it is helped that whatever schemes ultimately emerge will receive the closest scrutiny and most earnest consideration. The fortunes of one of the biggest cities in the world will be at stake, and faulty planning may do as much harm to the place as any that has been done-up to the present. Historically Shanghai is still young. Its youth has all the advantages and disadvantages inseparable from that quality. But it has amongst the former those great. qualities of energy, resilience and enthusiasm. Further-mote its past fortunes have been built on a solid foundation and given the opportunity, and the necessary protection, which any new scheme must envisage, there is no reason why Shanghai should not march on to heights greater than those which it has already attained.
Text read from the printed page and cleaned; old type leaves the occasional error.