Dearie:Russell Family History

THE MALAY MAIL, WEDNESDAY, MARCH 24, 1937

MALAYAN COLLIERIES’ BIGGER PROFITS

Result Of Improved Conditions In Tin Industry

$858,350 NEW CAPITAL ISSUE

IMPROVEMENT in the Malayan coal industry in consequence of the improved conditions in the tin mining industry are reflected in the annual report of Malayan Collieries, Ltd., to be presented at the annual meeting in Kuala Lumpur on Tuesday.

The report of the General Managers, Messrs. J. A. Russell and Co., shows that sales increased by almost 34 per cent. on the previous year, the increase being attributed principally to the demand for small coal as the result of the high percentage tin quota which obtained throughout the year.

The profits for the year amounted to $596, 374.80 compared with $469, 970 last year.

NEW CAPITAL

It is proposed to make a new capital issue of $858,350 in ten dollar shares, the General Managers explaining that during the early years of the depression considerable encroachment was made upon liquid reserves to carry through a capital expenditure programme which very materially assisted the company through the depression to the present improved conditions. Further capital expenditure is now required, and will be required from time to time, and rather than depend entirely on profits for this the directors have decided to proceed with a new capital issue.

The directors’ report states:

Production continued to be confined to the Batu Arang Colliery. The quantity of coal sold shewed a satisfactory increase upon the previous year, this being in keeping with the continued improvement in the tin mining industry and industry in Malaya generally.

All expenditure of a capital nature was in the improvement of the Batu Arang undertaking, the item Buildings being unusually heavy. This was due to the accelerated replacement by permanent buildings of a number of temporary shops and lines which were demolished by fire and to an attempt to replace as many as possible of the remaining temporary buildings with those of a permanent nature.

The plant and equipment installed was again of a general colliery nature both on the surface and underground.

The operation of the subsidiary undertakings was influenced by markets for the products and towards the close of the year the position had materially improved.

FINANCIAL POSITION

Investments were increased by the purchase of $131,400 worth of 3 per cent F. M. S. Loan.

The profits for the year under review,

subject to the directors’ fees amount to……….$596.374.30

To which is to be added the un-appropriated

balance from the previous year ……………… 264.233.65

860.608.45

Deduct three interim dividends each of

2 ½ per cent. totalling 7 ½ per cent. on 257.505

shares were paid during the year, absorbing……193.128.75

667.479.70

You will be asked to sanction fees to directors

In respect of 1936 at the rate of………………...20.000.00

Leaving available ………………..647.479.70

Which the directors recommend should be

Dealt with as follows

A final dividend of 7 ½ per cent. on the

257.505 shares making 15 per cent. for

the year 1936 193.128.75

Write off leasehold property 100.000.00 293.128.75

Balance to carry forward to next year’s account $354.350.95

Accompanying the report is a circular letter dated March 22, 1937 advising shareholders of the decision of the board to make an issue of shares at par. Shareholders on the register at March 30, 1937, are invited to subscribe to this new issue at the rate of one new share at par for every three shares held. The issue will make available the sum of $858, 350 towards future capital expenditure.

Mr. H. H. Robbins and Mr R. C. Russell retire and being eligible offer themselves for re-election. Mr. J. Drysdale acted for a time during the year as alternate director.

Messrs. Evatt & Co. (auditors) retire and, being eligible, offer themselves for re-election.

GENERAL MANAGERS’ REPORT

EFFECT OF HIGH TIN QUOTA

The General Managers’ report states:

The sales shewed an increase of almost 34 per cent. on the previous year. The increase was principally in the demand for small coal as the result of the high percentage tin quota which obtained throughout the year.

The larger portion of production was from underground mines, Nos. 2, 6 and 7 districts of the East Mine and underground units Nos. 3, 4 and 7 being the principal winning places. In most cases the modified long-wall system of extraction was adopted. Hydraulic stowage arrangements continued to operate satisfactorily.

The extension of the main dip and its companion way was continued and No. 3 district has been opened up. The connection to underground No. 3 unit was made by extension of No. 17 level East Mine. No. 4 district East Mine and underground No. 7 were opened as producing units.

Production at the block between opencasts Nos. 5 and 7 was completed, and a block in opencast No. 5 was being developed. Nos. 3 and 8 were the main producing units. Two electric shovel-dragline machines in conjunction with locomotives and the necessary waggon rolling stock were employed on shale stripping. A commencement was made on the opening up of opencast No. 9.

The coal washery worked throughout and satisfactory performance was maintained.

FIRE DAMAGE

Buildings and plant were maintained in good order, and the process of replacing temporary buildings by permanent ones was continued. A fire in a temporary section of the village necessitated the speeding up of this programme. Thirty-six shop houses, a set of Tamil lines and some artisan quarters had to be built to replace those destroyed.

The power plant continued to meet all requirements and the bulk of the fuel used in the boilers was of unmarketable quality. Final recommendations were submitted for the new high pressure boiler plant.

Capital work was somewhat larger than usual and consisted principally of new buildings, excavating plant, colliery equipment, both mechanical and electrical and railway line extensions.

Shortage of skilled underground labour made the position rather difficult and a strike lasting three days was experienced in November as a result of which wages were increased.

Coal prospecting in Johore continued throughout the year, at the end of which it was concluded that no commercial deposit existed and operations were terminated. In order to ascertain the extent to which workable coal, if any, occurs in the Batang Padang area, prospecting is in progress.

THE BRICK WORKS

As brick stocks were being depleted, the works resumed operations in January and have continued in operation throughout the year. Quite a good demand existed and some large contracts were executed, the most outstanding being the new building of the Rubber Research Institute which is an attractive example of faced brickwork.

The production of the plywood works was fully five million square feet of plywood, the bulk of which was converted into rubber chests. The demand for plywood board improved, and the packers grade rubber chest became more popular.

The pilot saw mill continued to meet the main requirements of the property and one or two parcels of lumber were sent to the home market. The construction of the railway to the timber area continued.

The wood distillation plant continued in operation throughout most of the year, occasional short stoppages being made in retorting to enable stocks to be cleared. Progress in marketing the products is still slow, although the position is improving.

Members of the staff have rendered excellent service and a good spirit of co-operation continued between all departments and individuals.

The general health of the resident population continued to be exceedingly good, and apart from the strike already referred to, the morale of the labour force was generally very good.

NEW CAPITAL ISSUE

A circular letter to the shareholders states: During the early years of the depression considerable encroachment was made upon liquid reserves to carry through a capital expenditure programme which very materially assisted the company through the depression to the present improved conditions. Further capital expenditure is now required, and will be required from time to time, and rather than depend entirely upon profits to meet this, your directors have decided to proceed with a new capital issue

The company’s authorised capital is $4,000,000 in 400,000 shares of $10 each, of which 318, 667 have been issued. Of these issued shares 61,162 were surrendered to the company and at present are not in circulation and do not rank for dividend, the actual ranking capital being therefore $2,575,050. The directors have passed a resolution for the sale to shareholders on the register at March 30, 1937, of 85,825 shares of $10 each, being at the rate of one share at par for every three shares held. The issued and circulating capital will then be increased to $2,433,400.

The new shares will rank for dividend pari passu with the shares now in circulation as regards all dividends declared after July 1. 1937.

Shareholders right to apply for their proportion of the shares to be issued for cash must be exercised on or before July 31, 1937, and the new shares paid for in full by that date by depositing with the Kuala Lumpur branch of the Hongkong and Shanghai Banking Corporation the full amount of $10 per share.

Any shares not applied for by July 31, 1937, will be disposed of by the directors on behalf of the company as they may think fit.

No fractional certificates will be issued to shareholders but the directors will issue to trustees, for sale on behalf of those share holders entitled to fraction of a share, certificates in respect of the sum total of such fractions.

Application forms for shareholders’ rights and letters of renunciation will be posted on March 30.

THE MALAY MAIL, WEDNESDAY, MARCH 31, 1937, p. 10 & 11 & part of Robbin’s speech in Malay Mail Tuesday, March 30, 1937 p.10, under the Headline: “Remedies for Labour Unrest. Malayan Collieries’ Chairman’s Views, and The Straits Times, 31 March 1937, Page 7, under title: REARMAMENT BENEFITS TO MALAYA. High Tin Prices Reflected In Malayan Collieries' Profits. CHINESE IMMIGRATION SYSTEM CRITICISED. & The Singapore Free Press and Mercantile Advertiser, 31 March 1937, Page 9, FAULTS IN CHINESE IMMIGRATION QUOTA SYSTEM Compares Badly With Indian Arrangement MALAYAN COLLIERIES LTD. ANNUAL MEETING. A.G.M. mentioned in The Straits Times, 31 March 1937, Page 11, Labour Problems In Malaya.

TRAFFICKING IN CHINESE LABOURERS
Iniquitous Practice In Coast Ports of China
WHY MAMAYAN COLLIERIES ARE SHORT OF UNDERGROUND WORKERS
Criticism Of The Shipping Companies

The system of immigration of Chinese labour in relation to the shortage of workers for the company’s underground operations was criticised by Mr. H. H. Robbins, presiding at the annual general meeting of Malayan Collieries Ltd. in Kuala Lumpur yesterday.
Mr. Robbins disclosed that repeated requests for permits to make it possible to send head men to China to recruit labourers had been refused, apparently on the ground of the abuse to which some of these permits had been put in the past. He went on to condemn “the iniquitous practice which exists between some of the steamship companies engaged in the transportation of immigrants and their passage brokers cum boarding-house keepers at China coast ports, “ and remarked that it was a great pity that the Chinese and Malayan Governments did not combine to eliminate these abuses. “Such profiteering by individuals and organisations at China coast ports,” he added, “is something with which one would expect any self-respecting steamship company to refrain from having any association.”
The chairman in moving the adoption of the report and accounts said:
“The year under review maintained the promise which was in evidence when last I addressed you and though the course was not an easy one, it is gratifying to be able to record continued improvement in your company’s position.
“The report and accounts having been in your hands for the prescribed period may I take them as read? Turning to the figures on the balance sheet, on the liabilities side it will be seen that capital remained unaltered.
“Dividends unclaimed and sundry creditors and credit balances remain about the same, the latter notwithstanding the much larger turnover. The general reserve remained at $1,200,000 while the mine amortisation fund is increased by the usual annual provision of $60,000.
“On turning to the assets side it will be noted that leasehold property is reduced by the $100,000 provided at the last meeting.

HIGHER EXPENDITURE

“The expenditure on capital account was considerably higher than has been the case for several years, the increase on the amount spent on permanent buildings being necessitated by the fire referred to in the General Managers’ Report and by the considerable increase in the Asiatic staff and labour force owing to the revival for demand for our products, it being considered wiser to provide buildings of a permanent nature at the outset then to erect temporary ones with their attendant high maintenance and eventual replacement cost. Considerable permanent building work remains to be done, mostly in the replacement of temporary and semi-permanent buildings which for the most part have served their useful life and which do not appear in our balance sheets as assets.
“For the rest, the plant purchased and installed was incidental to the colliery undertaking. Considerable further expenditure both on buildings and plant, especially power plant, remains to be incurred and steps have been taken to finance this, in part independently of profits.

INCREASE FOR DEPRECIATION

“The allocation for depreciation is higher than in the previous year by some $60,000, this being considered advisable as a result of the greater wear and tear on plant incidental to greater production.
“Operating stores and spares shew a decrease, this being due principally to the transfer from stores to various capital works of a considerable quantity of plant and equipment to take care of the enlarged operations.
“Sundry debtors and debit balances as is to be expected are a little higher. The reserve for bad and doubtful debts remains the same and is ample to cover all contingencies.
“Investments and cash in bank and on deposit shew an increase of some $224,000, the investments having been added to by the purchase at par of $131,400 in the 3 per cent. F.M.S. Loan. The balance of cash remains in our bankers’ hands awaiting favourable investment.
“The trading and profit and loss account discloses a profit of $596,374, this being $126,404 higher than for the previous year.
“The demand for coal within the F.M.S. increased more or less in step with the exportable allowances under the Tin Restriction Enactment, the percentage of standard production being 90 per cent. international and 65 per cent. domestic for January and 105 per cent. international and 76 per cent. domestic respectively for December. The allowance at the moment is, as you know, 100 per cent. international and 72 per cent. domestic with 110 per cent. international and 79 per cent. domestic for the quarter commencing with April.

LABOUR SHORTAGE
IMMIGRATION SYSTEM CRITICISED

“The supply of labour for our underground operations was inadequate, necessitating an unduly large part of our production being drawn from our opencast mines, and this unbalanced our stripping programme.
“Under the existing Chinese immigration quota system it was found quite impossible to bring our underground labour force to the required strength, and repeated requests for permits to make it possible to send head men to China to recruit men who are either experienced in underground work or attracted by such conditions, notwithstanding very full explanations of our position, have been refused.

“INIQUITOUS PRACTICE”

“Apparently the main reason for withholding permits is the abuse to which some of them have been put in the past. This abuse has been the sale of such permits for, it is said, as much as a hundred dollars per head and if this is so, it would seem that the fault lies more with the existing quota system than with the permit system. The iniquitous practice which exists between some of the steamship companies engaged in the transportation of immigrants and their passage brokers cum boarding-house keepers at China coast ports is largely responsible and is much to be deplored.
“It is a great pity that the Chinese and Malayan Governments do not combine to eliminate these abuses by introducing some of the control and organisation which characterise the satisfactory Indian immigration system. This, with a permit system if necessary within a quota system, would ensure the reservation of blocks of accommodation for batches of coolies. It would also give the Government and employers some control over the class of labour brought into the country and free the immigrant labourer of the filching of his savings or the mortgaging of his future. Such profiteering by individuals and organisations at China coast ports is something with which one would expect any self-respecting steamship company to refrain from having any association.

MINE STRIKES
OPEN DEFIANCE OF AUTHORITY

“Until quite recently we have had every reason to be proud of the understanding and confidence which have existed between the company and its labour force. Recently, however, there has been considerable restlessness and a growing unreasonable attitude in our labour, culminating in two strikes within four months, the first in November and the second last week. The first was settled within a few days without any action being taken against the professional agitators responsible for the stoppage.
“This seeming immunity apparently engendered confidence in the ringleaders of last week’s trouble and their attitude was one of open defiance of all constituted authority of Government and the company alike. It was made perfectly clear that their action in bringing to a standstill a key industry of the country was primarily aimed at Government with the object of trying to force the hand of Government in the matter of strikers arrested in another part of the State. Government accepted the challenge and all concerned are to be congratulated on their masterly treatment of a very difficult situation at a time when intimidation of the grossest kind was rampant.
“Purged of the contaminating influence, the men returned to work in good heart and the organisation was re-established and production resumed within a few hours. As a result of our observation during the past twelve months or so and experience in November and last week, it is clear that age-old customs such as the use of intermediaries between the employer and the labour must be gradually eliminated. Though we have never favoured the sub-contractor system and have exercised control over deductions by contractors, if the time has arrived when the contractor system has become irksome and the coolie feels that with the necessary additional help and support of his employer he can work without a contractor, this company will not hesitate to afford the help and assistance required.
“A good deal has already been done in this connection, but in seeking to benefit the labourer we have to be careful not to unduly injure others who have served the company well and who, though victims of change, can still serve the company in an altered capacity. The change, therefore, must be more a process of accelerated evolution.

A WAGES BOARD

“It is being freely suggested that the time has arrived to consider the setting up of a Wages Board for the whole country or some form of industrial arbitration, the law requiring every class of labour to submit its grievance to such a Board or Court. Such machinery has emerged from much bitterness and industrial strife in other countries where 100 per cent. of the workers are citizens of the country and it would not appear unreasonable for the Government of this country, where the majority of the workers are only temporarily domiciled, to compulsorily apply in advance a solution which otherwise will be arrived at ultimately, but only after much dislocation of industry and loss to both employer and employee.
To revert to my review of the year which closed with December last: The investigation of the occurrence of coal in Johore was concluded with negative results.
“Your company are now investigating a further occurrence in the Batang Padang District in Perak. Indications are that the coal here is less mature than that at Batu Arang and it is still too early to say whether it occurs in a commercial quantity.
“I do not propose taking up a great deal of your time with a record of progress made in the various auxiliary undertakings of your company. The improved conditions are reflected upon them and though last year continued to be one of intermittent operation of all three undertakings, the better demand at higher prices promises more continuous operation and more satisfactory returns during the current year.

CEMENT MANUFACTURE

“Our proposals in connection with cement were not materially advanced, though the matter is again under the active consideration of Government. As associates in the matter we are negotiating with important British interests in the cement manufacturing business throughout the Empire and you will be advised of any recommendation that we may have to make in due course. In that connection however, it is hoped that any interest which we may acquire in any new company to be formed can be financed without further appeal to you for capital.
“As you will have seen from the report from your directors for the year under review and from the accompanying circular, it has been decided to make a capital issue to provide in part for future capital expenditure and to make possible the speeding up of the work involved, notably the completion of the replacement of temporary quarters for the labour force and the installation of new boilers, additional electric generating plant, and further mechanical stripping equipment.
I feel you need no assurance that the money will be carefully and wisely spent in further strengthening the position of your company and in maintain its dividend-paying capacity. Those who seek an investment of surplus funds will find in the issue a very satisfactory one, while those who do not seek further investment, or feel that their holding in the company is sufficient, will no doubt find in the sale of the rights a ready cash return.
“The staff at Batu Arang has worked loyally and well throughout a very busy and at times exceedingly worrying year and the members have earned the thanks and practical appreciation of your Board.
“While I have been somewhat briefer than in past years, I trust that I have suitably augmented the information conveyed in the reports and accounts. If I have not, please do not hesitate to ask questions.

THE FUTURE

“I refrain from making any predictions as to what may lie in the future. Here in Malaya we have our troubles and those associated with our immigrant Chinese labour at present loom large. With the extremist element effectively disposed of and with the setting up of an effective tribunal as a result of the proper understanding an co-operation of all concerned, there would appear no valid reason why the inevitable organisation of labour within the limitations which it will be perfectly reasonable for Government to impose upon non-domiciled labourers, should not proceed in a perfectly orderly way.
“Our cost of production is, of course, increasing, but not out of proportion with the market value of coal.
“Internationally ominous clouds still overhang and paradoxically enough, it is these which to a large extent, account for our present comparative prosperity. We all hope that the clouds will clear with a better understanding between nations and while the effect of this upon world trade should be immediate and considerable. We must proceed cautiously in view of the more orderly progress of rearmament which would naturally result. It might be put that if we try to benefit by our past experience of trade depressions and the trials of our emergence therefrom and if we bear in mind that our present activity is to a certain extent engendered by abnormal, if not actually artificial conditions, we should not go very far wrong.
Mr. Lim Cheng Law: I would like to have more information about the accounts presented. I am not adopting a hostile attitude to the board, or to Messrs. J. A. Russell, but in the interests of shareholders generally it is most important that some idea should be given as to the salary and/or commission paid by the Malayan Collieries to Messrs. J. A. Russell, the General Managers and secretaries for the last year.
The chairman: A salary, but no commission, is paid and details are available and could be given in meeting or afterwards as Mr. Lim Cheng Law desires.
Mr. Lim Cheng Law intimated that after the conclusion of the meeting would be suitable.

SPLITTING OF SHARES
CHINESE SHAREHOLDERS PROPOSAL

Mr. Lim Cheng Law: I should like to inquire whether the directors have ever considered the question of splitting the shares of Malayan Collieries into smaller denominations from $10 to $1 a share, and if not, whether they will consider the matter at an early date. With the shares originally standing at $10 each there was not a free market, and if the shares were split into denominations of $1, not only would we be in consonance with the general opinion of the local share market, but more opportunities would be found in dealing in small numbers of shares. In addition it would also tend to the shareholders retaining their interest in the company more as an investment.
The chairman: The question of the splitting of the shares was referred to shareholders a few years ago, but the majority of shareholders voted against it. The matter has since been considered, and the board is prepared to reconsider it, but the matter would need to be referred to shareholders for final decision by way of a special resolution.

PAMOEKAN BAY TO BE SOLD.

Mr Lim Cheng Law: Is there any prospect of a recommencement of operations at Pamoekan Bay Colliery?
The chairman: There is no prospect of an immediate commencement of operations and, in the meantime, it is the policy of the board to dispose of the property.
The final dividend of 7 ½ per cent. was unanimously approved on the motion of the chairman, seconded by Mr. W. H. Martin. The directors’ remuneration of $20,000 was unanimously approved on the motion of the chairman, seconded by Mr. W. A. Stanton.
Mr. Lim Cheng Law: I have much pleasure in proposing the re-election of Mr. H. H. Robbins as a director. I consider it distinctly to the advantage of the Malayan Collieries that we should have the continuance of his services in directing its business. I believe I am right in saying that he knows our property from personal inspection, and from the address he has given us to-day, I am sure we all realise the great interest he takes in this great and important concern. (Applause).
This was seconded by Mr. W. H. Martin and carried unanimously.
Mr. Lim Cheng Law: May I rise again to support that Mr. R. C. Russell be re-elected as a director of the company? I think Mr. Russell’s services are very well-known to us all, and the resolution needs no words of recommendation from me. He is a worthy successor to a worthy and celebrated brother, the late Mr. J. A. Russell, whose memory is still cherished by the shareholders of the Malayan Collieries. (Hear, hear).
This was seconded by Mr. F. Cunningham and carried unanimously.
Mr. W. A. Stanton proposed and Mr. A. W. Delamore seconded that Messrs Evatt and Co. be re-elected auditors for the ensuing year.

SATISFACTORY RESULTS

Mr. Lim Chen Law: Before the meeting concludes I should like, as a shareholder—and I think I am voicing the feeling of a good many other shareholders—to express my appreciation by congratulating the directors on the satisfactory result which they have laid before us to-day, and which is substantially greater than that of last year.
For many years the shareholders of this company have, meeting after meeting, been in the happy position of, after listening to what the chairman has to say, going home from the contentment-laden atmosphere that generally pervades these meetings, with his dividend in his pocket and this time raised to 15 per cent.
The magnitude and strength of the Malayan Collieries is a matter of great pride to Malaya. Unlike many other industrial concerns I believe I am right in saying that its present position has been achieved by its own resources and initiative. This fact bears eloquent testimony to the skill and ability with which its affairs have always been conducted. I think, therefore, that the least we can do is to propose a very hearty and sincere vote of thanks to the directors, the general managers and the staff. (Applause).

LABOUR’S DEMANDS

Now, Mr. chairman and gentlemen, whatever may be said in favour of the strike as an instrument for the betterment of the conditions of labour, there can be no two opinions about the rights and the wrongs of the strike that is going on at the present moment. A strike of this nature is doing no good to the cause of labour in this country. It is in the nature of things that unbalanced persons, exulting in newly won power, should lose their sense of proportion and act unreasonably. Those of the strikers who are able to realise this have tried to import a semblance of reason into their demands by putting forward certain proposals regarding wages and conditions.
The elimination of this troublesome element will do much good to Malaya. For owing to their readiness to go on strike, Malaya, particularly Selangor, is already earning a very bad name. These labour troubles increased on a progressive scale owing to the weak-kneed attitude of employers. The Government must act under such circumstances with firmness.
I would like to see the inauguration of a department equivalent to a Ministry of Labour or the introduction of some efficient machinery sponsored and directed by the Malayan Government for the ascertainment, adjudication and settlement of industrial disputes between labour and capital. Had such machinery been in existence in Kuala Lumpur to-day, this strike would not have been thus unduly prolonged. (Hear, hear and applause).
The meeting terminated with a vote of thanks to the chair.