Evening star. [volume] (Washington, D.C.) 1854-1972, 1889-08-17
THE EAsT's FINANCIAL FOCUS.

THE EAsT's FINANCIAL FOCUS.
The Marvellous Progress Of Hong Kong
In Commercial Matters.
From FEW rrsHERNKx's HUrs TO FORTY MI
LION DoLLARs--A LOCAL RrALro IN THE
auTrKR-rHE UPS AND DOWNS OF ORIENTAL
I srocKs-How BUSINESS rs TRANSACTED.
From The Stars Travelling Commissioner
The Hong Kong stock exchange, il people at
home only knew Of il, would be regarded as
one OF the financial wonders of the world. But
hey do not, and indeed, to begin with, there is
40 stock exchange, properly speaking. in Hong
Kong. One is being established at this mo-
ment. What exchange there is now is the gut
ter From the bar of the club to about a hum
dred yards down the Queens road is the local
riaito. But there, all day long, a financial
business is done which doubt if any hundred
yards in the world, except the spaces includ-
ing the London and New York stock exchanges
and the Paris bourse, can equal either for vol
ume OF money, audacity of speculation, or
sensational ups and downs. Everything is done
enner under the punkahs in the hall OF the club
or literally In the gutter and by the most
motley crowd of brokers in double-decked hats
that the world can show.
MOTLEY CROWD.
There are Englishmen, Germans, Anglo-In-
dams, Chinese from Canton, Armenians from
Calcutta, Parsees from Bombay and Jews from
Bagdad. And from the princes of finance, who
play with millions OF dollars (there are several
ofthem In Hong Kong, down to the hnmblest
ana last-arrlved member of the .'black brigade"
with the physiognomy of Palestine and the
accent OF Spitaltelds. who buys ten shares
Shara oil
money iast There are practically no bank
ruptcies in long Kong. The former live in
their little palaces they entertain like princes.
they are as generous as they are prosperous,
the street and the corridors of the Hong Kong
hotel. And although to say that all Of them
make money is not unlike saying that two men
live on what they win from each other at cards,
still the paradox is a truth.
LITTLE VALUE OF MONEY.
Money in Hong Kong seems to have less value
than anywhere else, like wheat in Manitoba or
petroleum in Pennsylvania. player at poker
the other night dropped "long chip" value
Sl0O, under the table. "Maskee," he said in
somebody reminded him; IF you were at home
you'd look for 1t fast enough" by Jove," he
replied, $50 will! forgot how much it was"
Ana mere Is an example showing at once all
three characteristics have claimed above for
stock OF single mine in the Malay peninsula
upward OF million and half of dollars was
PAID by Singapore spectators to Hong Kong
spectators in less than fortnight and the
same shares were bought back by Hong Kong
within month at more than so per cent dis
count. AS for ups and downs. here are few
examples taken almost at random:
MARVELLOUS UPS AND DOWNS IN STOCKS.
The shares of the Hong Kong and Kowloon
Wharf and Godown Company, issued at hun
dred dollars, rose Immediately to sl95, fell to
600. Hong Kong and Shanghai Bank shares,
OF Sl25 par value, were at one time at eos per
cent premium, they fell again to 125 per cent
premium, and are today back to 200 per cent.
The Hong Kong and Whampoa Dock Com
pany shares, of S125 par value. rose from Is
per cent premium to 135 per cent iell to 26
per cent, and are quoted today at 95 per cent.
The Pudjom and Sunghie Qua Samaritan Gold
Mining Company (mne at Punjom, in the
Malay Peninsula) was hoated at $40 per share,
rose rose at once to Sl5, then jumped suddenly to
$50, fell back as suddenly, after considerably
over million dollars had changed hands, to S25,
at which price most of the shares we're bought
and sold again, and now they are firm at S35.
But perhaps the most sensational of all is the
1ongking coal mining company. The shares,
which by French law must be registered in
Paris, were issued at 500 francs say Sl3S They
rose ON issue to 90 per cent premium, then at a
jump to 10 per cent, then at another to go per
cent, and today they stand steady at 400 per
cent premium, say 500, with few OF no sellers,
In spite of the expense of holding them, as the
local banks will not advance a dollar upon min
ing shares which have not yet paid a dividend.
1 suppose it would be difficult to match this in
the history of recent finance.
FORMED ON A SOUND BASIS.
Now this state of things is the rule. not the
exception, in Hong Kong and it is seif-evident
that such high prices can only exist and have
existed on one condition, namely, that the
local ompanies-including, of course the en-
terprises In Borneo, in the Malay peninsula in
Manila, &C., of which the capital ia held in
Hong kong-were formed Oh sound basis and
are doing thoroughly well. Many of these ups
and downs are of course the merest gambling,
some OF them not even honest gambling, as a
say that much Of this is done by young men,
earning clerks salaries. who would find
such a course impossible elsewhere, But
gambling Is inseparable from prosperity,
and no gambling could produce the
same steady effect as legitimate profit
and promise. This is the case with the local
companies, but fancy very few people have
any idea Of what the combined capital of these
companies amounts to. The total number of
companies OF all kinds registered in Hong Kong
Is forty-four. Space prevents me from giving
list OF these, but l have made one and the
following facts are shown by it. The total cap
ital Of Hong Kong local companies is no less
than $40. 100000. The average dividend of
the local companies. which have already been
in existence long enough to pay one, is a frac-
ton under IL per cent per annum; and their
average annual yield to investors at the So
called inflated" current prices is 60 per cent.
NEW COMPANIES
are being foated almost every month in Hong
Kong. AS the new lands of the far east are
gradually developed it is to Hong Kong that
they look and must look for financial aid. And
capital there responds to the right call as the
fash responds to the trigger. For instance,
month ago a new issue OF shares of the Hong
Kong land investment company was made at SO
per cent premium 800 for a $50 share. The
number offered to the public was $4,000. No
| fewer than 5000 we're applied for Today
they are quoted at S145. or course there are
not wanting prophets of evil who foreteIl an
utter collapse of the Hong Kong market, as a
consequence Of what they are pleased to term
the gambling mania" prevalent In the colony.
Financiers at home send kilograms to their rep
resentatives here urging caution and merchants
write long homilies to their agents.
GAMBLING INTENTIONS
Yet I have heard that the very merchants
and friends, both at home and elsewhere in
China who are so anxious on the one hand that
Hong Kong should become a model of Scotch
prudence, or are SO ready, on the other, to de-
nounce it as ''bucket shop" are themselves