Increase in the Chinese migrants
Published on: Saturday, June 05, 2021
By: British North Borneo Herald
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Report of the One-hundred-and-first General Meeting of Shareholders of the British North Borneo (Chartered) Company held at River Plate House, Finsbury Circus, London, E.C.2, on Tuesday, 2Ist June, 1938.
Major-General Sir Neill Malcolm, K.C.B D.S.O., in the chair.
The Chairman: Ladies and Gentlemen, I will ask the Secretary to read the Notice convening the Meeting.
(The Secretary read the Notice convening the Meeting.)
The Chairman: Ladies and Gentlemen, I rise to move the adoption of the Report and Accounts, but before I say anything about them, I would like to say a few words about one who was well-known to many who are in this room today – our old friend, Mr Darby, of Harrisons & Crossfield.
It is not too much to say that Mr Darby’s whole life was wrapped up in the prosperity of North Borneo. He went there first in 1888 – just 50 years ago. He founded, and was Chairman of the China Borneo Company and the Sabah Steamship Company. He was also the first Chairman of the Sandakan Chamber of Commerce.
I think I can fairly say there has never been anyone who has been so closely connected with, and has done so much for, North Borneo and our commerce and industries there as Mr Darby. I know that I shall miss his personality and his wide advice very deeply, and I believe that many others will do so, too.
I have also to announce, with very great regret, the death on Thursday last of one of our oldest pensioners, Mr Alexander Cook, who retired from our service as long ago as 1909, after having been over 28 years in North Borneo, where he first served under the Provisional Association – the Chartered Company’s predecessor – and held high offices subsequently in our own Service, including the Deputy Governorship and the substantive appointment of Finance Commissioner.
I will now turn to the business of the day, namely, the Report and Accounts. I think you will agree that these again show added strength and improving prosperity to a greater degree than any other Report and Accounts which your Court has ever been able to present to you.
In the first place, we have been able to recommend for your consideration the payment of a dividend of 4 per cent against 2 per cent last year, so that we can either say that the dividend is up by 2 per cent or by 100 per cent. Either statement would be equally true.
Further than that, we are able, after paying 4 per cent to add £35,000 to our carry forward, bringing it up to nearly £72,000, whilst our investments have increased in value from £475,000 to f511,000, and our cash in hand at the 31st December, 1937, was £212,000 as against £81,000 at the end of 1936.
These, I think you will agree, are good results, but it must be remembered that they were attained in what was a specially favourable year.
As you see from the last page of the Accounts, where you get particulars of exports and imports, the value of rubber exported last year amounted to over £1,000,000, against less than £500,000 in 1936. Copra exported was valued at £89,000 as against £59,000, tobacco at almost £30,000 as against £8,000, and so on, pretty well throughout the list.
We cannot expect such good results for this year, however, as the price of commodities has fallen steeply, and, what is even more important to us, the export of rubber is heavily restricted.
Nevertheless, the results for the first quarter of this year are slightly better than they were for the same period in 1937, but the last returns we have, the returns for the month of April, show a substantial drop in comparison with those for April, 1937 – and we must be prepared for that drop to continue until rubber gives us a greater release and the price improves.
The important thing for us is to get a better release. The probability is, therefore, that the later months of this year will show some falling off in our profits. That is why we thought it prudent to put such a large sum as £35,000 to our carry forward. Although I think it right to strike this note of warning, there are certain other encouraging factors which should not be overlooked.
First amongst these is the increased immigration of Chinese owing to the fighting in their own country. Last year the total of arrivals, assisted and unassisted, was over 8,000 as against 5,000 for the previous year.
So far this year those numbers have been fairly well maintained, and, moreover, a good many of the immigrants, in the early part of the year, at all events, were bringing in a considerable amount of money with which to establish themselves in their new homes.
I left Borneo on the 11th April, and at that time the immigrants did not seem to be of quite such a good class, and it may be necessary to put on some sort of restriction, or selection, especially as the Straits Settlements have recently reduced their monthly quota of immigration very seriously.
The second encouraging feature is the reduction in our debts and expenses during the last few years.
You may remember that some years ago I told you that before the finances of this Company could be on a satisfactory footing we must attack our overhead expenses. This we have been doing now for at least 10 years with what are, I think, really very satisfactory results.
For example, the expenditure in Borneo, which in 1928 was £261,000, was reduced in 1937, last year, to £209,000 – a very considerable reduction – whilst in addition, Borneo charges for depreciation, etc., declined during the same period from nearly £55,000 to about £32,000.
Further, London standing charges for Debenture interest, etc., have been reduced from £106,000 in 1928 to £73,000 in 1937 – a reduction of about £33,000 a year. But perhaps most important is the reduction in our debt. Ten years ago our indebtedness, including Bank overdraft, the old Certificates, and our Debentures, amounted to no less than £1,731,000.
At the 31st December last, as you will see from the Accounts, instead of a Bank overdraft, we had £212,000 cash in hand, and the Debenture debt had been reduced by £454,000 to £1,154,000 whilst Certificates to the value of £108,000 have been redeemed.
That is to say, the position has improved during those 10 years by very nearly £800,000.
In addition to that, by the 1st July, that is in 10 days’ time from now, £154,200 of Debentures will a have been paid off, and in our next Balance Sheet, which will be made up to the 31st December of this year, our Debenture debt will stand at, or possibly under £1,000,000.
Our interest charges will, therefore, be very greatly reduced, and the whole of our Debenture will be paid off by the ordinary action of the Sinking Fund by 1965, even if there should be no more special repayments such as we have been able to make during the last few years.
I do not for a moment say that there will not be such repayments, but even without them it will not be very long now before that Debenture debt is wiped out of our Balance Sheet.
During this same period we have abolished the gambling farm, which used to bring us in a revenue of £29,000, and reduced our opium revenue, of which I shall have more to say later, by £60,000. Therefore, those two items of revenue bring in now £90,000 a year less than they did.
That is a very considerable sacrifice for the Shareholders to make, but I have no doubt that by the action of abolishing the gambling farm and reducing the consumption of opium your property will be enormously improved.
The third factor is the gradual introduction of new industries, which is due almost entirely to the enterprise of the small Japanese colony round Tawau. The export of dried and salt fish now amounts to over £51,000 as against £44,000 in 1936, and we may look confidently to further expansion as the result of a new station which will shortly be in operation.
When that new station is in operation, which ought to be in about October of this year we may find North Borneo tuna on the British market. But of even greater importance may be the cultivation of Manila hemp, which has gone ahead very fast since I spoke about it last year.
As you will see, the value of hemp exported last year was nearly three times as great as it was in 1936. Cultivation of this particular fibre has now been taken by certain British Estates and by Chinese and native smallholders, and altogether the Governor now has before him applications for 11,000 acres for Manila hemp cultivation.
We have the more reason to be grateful to our Japanese planters for the lead they have given us after experimenting for something like twenty years, as this is the only Manila hemp grown at present in the British Empire. Its value to our Fleet and Merchant Marine needs no emphasis from me, except to say that for this reason we have made a special feature of our hemp at the Glasgow Exhibition in the hope of attracting the attention of the British enterprise.
A rather curious fact which I should like you to know is that, although we had had visits and enquiries from Americans in the Philippines and firms as far away from US as Boston, the Japanese success has so far amused little interest in London except for our good friends, Messrs. Harrisons and Crosfield.
It is sometimes said that Manila hemp can only be grown successfully on volcanic soils. I must say I visited this hemp plantation when I was out in North Borneo, and although I am no expert on these matters, I must say the volcanic soil they have there struck me as being something very remarkable.
I personally have seen nothing like it, except in Java, and the Japanese themselves expect great results from the patch of soil they are now cultivating. As I say. it is sometimes said that Manila hemp can only be grown successfully on volcanic soil, such as the Japanese have near Tawau, but that hardly seems to be an established fact.
An American friend of mine told me that he was growing it successfully on ordinary good alluvial soil in the Philippines, and that in his opinion the only essential factor was a steady, all the year round rainfall, such as is usually found near the equator. But even if volcanic soil is essential, we would appear to have quite a substantial amount of it in North Borneo.
In the February, 1924, number of the Journal of the Royal Geographical Society, you can find a geological map of the South-East Coast of our territory, made by Dr Reinhard, based on surveys made by him and other geologists, in 1913-1914. A copy of that map is now with the hemp in the Glasgow Exhibition, and we have another copy of it here on the wall, which anyone may see who wishes to do so.
Further copies of that map are available for inspection at the London Office of the Company, and also in Borneo. On that map you will see several considerable volcanic areas, particularly near Tungku on the East Coast, an important fact which has recently been verified by the surveyors who have been prospecting for oil in that district.
Although that area is evidently volcanic, it has still to be proved whether there is or is not, soil there deep enough for agricultural purposes, it may be just rock with a shallow covering of soil or there may be good soil for cultivation; but in any case, there does not seem to lie any reason why an industry like this, which has begun with so much promise, should not expand considerably.
The industry has been pruned, and now all that is necessary is enterprise and capital… much for the agricultural developments.
Another favourable factor is that of pearl cultivation, which is now established near Semporna and promises quite well. Some 2,000 pearls were exported during the month of March, and there is every reason to believe that that monthly figure of 2,000 will be maintained.
At present the pearls are not of high quality or value - they are not in any way what one would call “jeweller’s pearls” – but they can be improved, I believe.
For the moment they are exported, via Japan mostly to the United States, where, I understand, there is a good market for them to be used as buttons on ladies’ dresses and similar uses. We shall know much more of this in a year or two. That is the last of the three newly established industries which I had an opportunity to see during my recent visit to North Borneo. They are in satisfactory order and should be very useful sources of additional revenue to us.
I now come to what I can only described, I am afraid, as a potential industry, but one which may be of greater importance than all the other three put together. I mean, of course, our oil, of which no doubt I expect you would like to hear something.
In 1934, I think it was, when this enterprise started, I told you that it was unlikely that I should be able to give your any definite information before our Meeting in 1938.
Last year I told you that I had nothing encouraging to say and that “it certainly looks as though once more we had been thrown back upon our agricultural resources.” I also said that “the quest will not be abandoned while any corner of the country remains to be tested,” and that “even at the eleventh hour luck might turn”.
Even today, in 1938, I cannot tell you that the luck has turned, but I can say that the prospect is distinctly better than it was 12 months ago. Work is still going on, and such hope as there is centred now upon the Dent Peninsula, the most easterly part of the territory.
The geological survey is not yet complete, and it may be another 12 months or so before the Oil Company is able to decide whether to incur the expense of putting down bores or not.
Then, even if they do bore, there is no certainty that oil will be found in payable quantities. Much, indeed very much, still remains to be proved, but there is a glimmer of hope now where there was almost none last year.
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