New Britain herald., 1917-07-03
POOR BUSINESS MEN
 GERMAN MERCHANTS
Had Big Trade at Hong Kong
 But No Profit

lCorrespondence of the Associated Press.)
 London, June 25.--When the war began nearly thirty per cent. of the trade of Houk Kong, excluding Chin CSC native trade, was in the hands 3f Germans whose business methods were considered by many to be most progressive and worthy of emulation. 1t now appears from the investigation of enemy firms that the methods enl- ployod by the Teutons were, despite the great volume of trade, unsound and unprofitabl according TO the periodical Truth which publishes an article based on a book just written by Dennis k. Moss a man of long ex- perience in Chinese trade and one of the HGuldatOrs of enemy firms in Hong Kong
 The Knowledge gained from the liquldations is summed up by MT. Moss as being. mainly. a more com pete knowledge of how not to do business, says Truth. "Instead of the valuable lessons in trading meth ods which some people expected, the merchants and accountants in charge of the windings-up discovered prac- tlcally nothing but cvidence--unmis takahle, conclusive evidence--of tho unsoundnesS and unprofta bleness of the lines on which the Germans did business. Nearly thirty per cent. Of the trade of Hong Kong (excluding Chinese native trade) was in their hands, but they did not make one twentieth of the profits of the British indeed. more than one British firm there makes for itself net profits equal to those of all the German firms Jumped together The great aim of the latter was to have a big turn over, no matter whether there was any profit or not.
 "As an instance of this on the ex- port side. one firm had built up a turnover of s4.000.O00 a year in silk. but only covered the cost of running the department All engaged in cut throat competition. not merely against British rivals. but against one an- other, and even in the handling of their own German and Austrian man ufactures. Tn the main, however. the goods they sold to the Chinese-giv- ing dangerously long credits-con- sisted of Manchester and Bradford goods, for, though the plums of that trade in Hong Kong were retained by British firms, the Germans had captured a substantial portion of it
 
 showed-on miserably inadequate terms. sometimes even at a loss. This had temporarily benefited Manchester and Bradford merchants, but many of the enemy firms were getting deep ] or and deeper ino a state of such | chronic overtrading that very little l would have been needed to upset the | whole fabric and bring about a crash 1 which would have seriously injured l British mercantile and banking in i terests.'
 Tt Is not at all surprising to | learn that German firms at Honk 1 Kong added dishonesty to their reck- lessness in trading. The winding-up 1 inquiries disclosed the fact that the 1 bulk of their business was actually 1 done on capital borrowed on what | were virtually false pretenses from London finance houses. Nor is 1t 1 surprising to learn that merchants l who treated their own letters of 1 lien as so many scraps of paper de- | violated the conditions | under which they were allowed to 1 continue business in Hong Kong for two or three months after the out break of war"
 The periodical says that MT. Moss certainly shows that the methods of | German traders 'are for the most ! part methods to be avoided" and l adds in conclusion:
 And Hong Kong Is not the first | place from which we have had proofs l that German commerce, about the | growth of which we used to hear sa 1 much, rested on very unstable l foundation"