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gling to regain possession of rolling-stock. The interruption of railway traffic proved a handicap, not only to merchants who are interested in the distribu- tion of imports but also to farmers, who were unable to market their bumper crops. The movement of goods was further handicapped by the excessive taxes imposed upon railway cargo in the form of likin, goods taxes, military sur- charges, etc. These taxes were often so heavy that commercial transactions, especially the trade which passes from the Kalgan district to the port of Tien- tsin, were at times entirely discontinued. Apart from political phases, the sever floods along the Pei-Ning line beyond Shanhaikwan held up traffic for a month. On the other hand, the waterways remained in a fairly satisfactory condition, and, owing to the good harvest, there were large stocks of grain available for boat transportation. As a further aftermath of the disastrous attempt to form a separate government in the North, currency conditions became unstable, especially in Shansi, where a large number of insufficiently secured paper notes were issued. This currency was soon only accepted at one-third to one-half its face value, placing an impossible handicap on Shansi merchants, from which they were unable to escape, as an embargo was placed on the exportation of silver money from this province. In view of these deplorable conditions it is not surprising that the trade of Tientsin, which has been expanding steadily from year to year, suffered a severe set-back. Furthermore, the heavy drop in the value of silver greatly lessened the pur- chasing power of consumers of foreign goods, and the general economic depres- sion abroad seriously affected the export trade of the district, offset, however, to a certain extent by unusually good crops of all agricultural products in this area.
Although the December quarter saw peace in North China and and the restoration of the Tientsin Customs establishment to the proper authorities, the breakdown of the Northern Coalition was a severe financial loss to certain local firms, as contracts for the delivery of machinery, especially motor-trucks, to the Northern militarists could not be fulfilled, and these goods had to be taken into stock, which meant a heavy outlay in Customs duties. Amongst imports, the most noticeable feature was the marked preference for the cheaper Japanese cotton articles in place of the more costly British articles. Even in the more expensive cottons, such as velvets and velveteens, the Japan- ese manufacturer has worn down practically all competition and recovered the ground lost during the anti-Japanese boycott of 1929. Old gunny bags have been imported in larger quantities, which may be accounted for by the favourable conditions in the export trade of beans and groundnuts. Importa- tions of foreign flour fell from 5,260,000 to 1,700,000 piculs in view of the activities of local flour mills, the output being approximately 6 million bags. The exchange situation restricted the importation of flour from North America, and the best crop of wheat in the district for over 10 years reduced the price of the raw material. An embargo on the export of flour from Shanghai also helped to keep the price of the locally milled product at a high level. Towards the end of the year, however, Canadian and American flour began to come into the port in large quantities, and the comparatively small local mills ex- perienced strong competition. The immense increase in foreign rice, to which attention was drawn in previous reports, has, however, unabated. The lowest export trade for years is due to the depression in the world markets, the excessive taxation on goods brought down from the interior, and local warfare. A further obstacle was the Soviet Government's monopoly policy of attempting to corner the outer Mongolian markets and divert the valuable skin and wool trade to non-Chinese ports: this policy constitutes a grave menace to the trade of North China, and, unless action of some sort is taken, disastrous results are likely to follow. Raw cotton-mostly produced in the Hsiho region, where the crops were excellent-found a ready market in Japan and America. Shansi cotton arrived in comparatively smaller quantities, largely owing to the steady demand in the province caused by the opening of three new 'cotton mills. There was a strong demand for groundnuts in shell, Great Britain and the Continent being good purchasers. The export of walnut kernels appears to be a growing and profitable trade with America. In spite of the general trade
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