Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1917-07-07
GERMANS USE
UNS0UND MEANS
OF BUSINESS
One Firm Turns Over $4,.
100000 Worth of Silk in
Year-Make Expenses.

"oAAASAAS oAAy ts\SoA OopOAANSAASS(
When the war began nearly thirty
per cent of the trade Of Hong Kong,
excluding Chinese native trade, was
in the hands Of Germans whose bust
ness 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 employed by the
Teutons Were, despite the great vol
ume of trade, unsound and unproft-
able, according to the periodical
Truth which publishes an article bas-
ed on a book just written by Dennis
K. Moss, a man of long experience in
Chinese trade and one of the liquidat-
ors Of enemy firms in Hong Kong.
THE knowledge gained from the
llquldations is summed up by Mr..
Moss as being, mainly, a com-
plete knowledge of how not to do
business, =" says Truth. INSTEAD of
the valuable lessons in trading meth.
DDS which some people expected, the
merchants and accountants in charge
Of the windings-up discovered prac-
tically nothing but evidence-unmis-
taxable, conclusive evidence-of the
unsoundness and appropriateness OF
business. Nearly thirty per cent of
the trade of Hong Kong 1(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 turnover, no
matter whether there was n profit
or not.
A an instance of this on the ex
port side, one. firm had built up q
turnover Of $4,000,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 anoth-
er, and even in the handling Of their
own German and Austrian manufac-
lures. In the main, however, the goods
they sold to the Chinese-giving dan
gerously long credits-consisted OF
Manchester and Bradford goods, for
though the plums Of that trade in
Hong Kong were retained by British
firms, the Germans had captured 9
substantial portion Of it by taking
business-Tas their books showed-or
m~iserably Inadequate terms, some.
times ever at a loss. This had tenn.
porartly benefited Manchester and
Bradford merchants, but many Of the
enemy firms were getting deeper and
deeper into a state Of such chronic
overtrading that very little would
have been needed to upset the whole
fabric and bring about a crash which
would have seriously injured British
mercantile and banking interests
ut Is not at all surprising to learr
that German firms at Hong Kong ad.
ded dishonesty to their recklessness ir
trading. The w%fnding-up inquiries dis.
closed the fact that the bulk Of theil
business was actually done on capita
borrowed on what were virtually
false p%retenses from London finance
houses. Nor is 1t surprising to learr
that merchants who treated theil
letterst of lien as SO many scraps O,
paper deliberately violated the condi
tons under which they were allowed
to continue business In Hong Konf
for two or three months after the out
break Of war;"
The periodical says that Mr.. Mos,
certainly shows that the methods O
German9traders ARE for the most par
methods to be avoided" and adds ii
conclusion:
And Hong Kong is not the frs
place from which we have had proof
that German commerce, about tn,
growth Of which we used to hear s,
much. rested IN a very unstable foun
dation."